Abstract Literacy learning - learning how to read and write - begins long before children enter school. One of the key skills to reading and writing is the ability to represent thoughts symbolically and share them in language with an audience who may not necessarily share the same temporal and spatial context. Children learn and practice these important language skills everyday, telling stories with the peers and adults around them. In particular, storytelling in the context of peer collaboration provides a key environment for children to learn language skills important for literacy. In light of this, an embodied conversational agent, Sam, who tells stories collaboratively with children was designed. Sam looks like a peer for pre-school children, but tells stories in a developmentally advanced way, modelling narrative skills important for literacy. Results demonstrated that children who played with the virtual peer told stories that more closely resembled the virtual peer's linguistically advanced stories: using more quoted speech and temporal and spatial expressions. In addition, children listened to Sam's stories carefully, assisting her and suggesting improvements. The potential benefits of having technology play a social role in young children's literacy learning is discussed.
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