Situations shape how we learn and who we are. This chapter reviews two case-studies in order to identify key points of interplay between physical world and virtual world identities and how this impacts on identity reformation. The first study reviews findings of a study that explored the use of simulated language learning scenarios (i.e. a Spanish virtual house) and gaming within a virtual world. The second study presents evidence from a comparison of virtual and gaming world interactions and a comparison of Second Life^TM tutorial situations (i.e. environments that are; realistic compared to surreal, enclosed compared to open, formal compared to informal). Identity reformation was enabled and inhibited by conceptual links (i.e. students' physical world identities, memories and concepts of self) between virtual and physical world situations. However, academics' role in identity reformation within these new learning contexts is posed as the current barrier to virtual world learning.