["International Journal of Art &Design Education, EarlyView. ", "\nAbstract\nAs virtual worlds (VWs) continue to evolve, their potential to transform creative and collaborative learning in art and design education is increasingly evident. Yet, their integration into higher education curricula through multimodal design remains underexplored. This study responds to that gap by embedding VW technologies into an undergraduate Design Fundamentals course, reimagined through a design thinking framework and examined using a social semiotic approach. Conducted over 8 weeks, the course invited 15 university art and design students who had completed foundational coursework to create immersive, group‐based projects within virtual environments. Employing an action research approach, the study involved iterative cycles of planning, implementation and multimodal analysis to investigate how students engaged with VW affordances to develop collaborative design practices. Findings revealed that students recontextualised cultural references, negotiated visual languages, co‐constructed multimodal narratives and cultivated creative agency through iterative experimentation, while building their creative confidence for advanced design learning. This study contributes new insights into the pedagogical value of VWs in higher education and demonstrates a rigorous, practice‐based approach to cultivating creative confidence and collaborative design literacy among novice learners.\n"]