This paper presents our recent experiences with the design of game-like applications in 3-D virtual environments as well as its impact on student motivation and learning. Therefore our paper starts with a brief analysis of the motivational aspects of videogames and virtual worlds (VWs). We then go on to explore the possible benefits of both in the area of foreign language learning. For our research study we have designed a VW-platform, called VirtUAM. This permits us to store and record data related to users’ behaviour within the VW. Furthermore the platform has been employed to build several islands (virtual spaces), which implement different game levels. The virtual spaces themselves are used to give students a basic training in different language skills related to the German language. In order to obtain data regarding the game’s impact on student learning and motivation, we designed several tests, which were completed both before and after the student participants played the game. Additionally we gave them a general questionnaire, which was only filled out after the game and which aimed at getting personal feedback from the learners. Quantitative and qualitative results shown in this work are part of a larger project which intends to study the impact of game-like applications within virtual environments and with regard to teaching and learning processes in general.