Joanne Hardman's and Alan Amory's introduction to Cultural-Historical Activity Theory (CHAT) and the associated case studies presented in Part 1 of this book provide the foundations for understanding the role of technology-enhanced learning within complex activity systems. Hardman and Amory argue that teaching and learning with technology are culturally situated, historically informed and imbued with power and control. These factors impact on the ways in which technologies are employed and their effectiveness in supporting transformative approaches to teaching and learning. Their discussion of tool mediation focuses more specifically on the role that tools (both material and/ or cognitive) play in mediating between subject and object in fulfilling an activity within activity systems. This chapter builds on these foundations by exploring three dimensional virtual worlds (3DVWs) and Second Life (SL) in particular, as emerging technologies with affordances that can support transformative learning through authentic learning activities. The chapter describes the experience of trialling SL in Accessible Interactive Media (AIM), which is a final year media arts course offered by the School of Communication, International Studies and Languages at the University of South Australia. The analysis of the technology-enhanced learning activities employed in the course draws on CHAT with a particular focus on the affordances of SL as a mediating tool, and Herrington, Reeves and Oliver's (2010) authentic learning framework to discuss the potential benefits and challenges in the use of 3DVWs as material and cognitive tools for facilitating transformative pedagogical approaches within the undergraduate curriculum.