Introducing new digital literacies into classroom settings is an important and challenging task, and one that is encouraged by both policy-makers and educators. This paper draws on a case study of a 3D virtual world which aimed to engage and motivate primary school children in an immersive and literacy-rich on-line experience. Planning decisions, early experimentation and the experience of avatar interaction are explored. Using field notes, in-world interviews and observations I analyse pupil and teacher perspectives on the use of digital literacy and its relationship to conventional classroom literacy routines, and use these to trace the potential and inherently disruptive nature of such work. The paper makes the case for a wider recognition of the role of technology in literacy and suggests that teachers need time for experimentation and professional development if they are to respond appropriately to new digital literacies in the classroom.