Efforts have been made by language educators and researchers to use computer technology to assist L2 learners’ growth in either linguistic or intercultural competence. Nonetheless, web-based environments devoted to developing both types of competences in tandem are new and experimental. The purpose of this project, which involves the collaboration of EFL educators and computer engineers in Taiwan, is to establish an innovative web-based environment to support students in tertiary levels to develop both types of competences. This web-based EFL learning environment experiments with a few main features: (1) instead of reading articles about a foreign culture, the users of this website read articles about their native culture; (2) two on-line computer-based support tools, a bilingual concordancer and a dictionary, are made available to provide students with contextual supports for language learning; and (3) discussion boards are provided for intercultural communication. The web-based learning environment contains several instructional units. While working on a unit, students read an article and then answer comprehension and vocabulary questions. After reading, students share their responses to the articles with intercultural conversation partners via online forums. To evaluate the effectiveness of the learning environment, the researcher recruited a group of Taiwanese university students to test-use the system. Frequencies of the uses of the two e-referencing tools were calculated. The students’ responses to a questionnaire were examined and informal interviews with the students were conducted. Finally, the students’ forum entries were analyzed. The findings revealed initial interest in using e-referencing tools but a dramatic decrease in use after the first few units had been completed. The students used the concordancer as a link to extensive reading materials and suggested adding pronunciation tools to the dictionary. Questionnaire findings showed that students were generally satisfied with the design of the web-based learning environment. An analysis of the students’ forum entries revealed increases in the length and complexity of sentences in their writings, as well as reductions in grammatical errors, as more units were completed. As for intercultural learning, the content analysis of the forum entries demonstrated different types of intercultural competences. Based on the findings, some implications for revision of the virtual environment to enable more effective learning of English as a foreign language and greater development of intercultural competence are drawn.