This study aims to investigate the influence of story creation on young EFL learners' reading performance. Action research was adopted to examine the effects of two different story reading projects in a library setting in Taiwan. Each project comprised a group of 19 young EFL learner from Grades 4 to 6 (aged 10-12). The first group's activities consisted of picture storybook reading and word games. The results obtained from the pre- and post-reading tests on the learners' performance revealed an increase in their English reading scores. But the results of the learners' motivation and anxiety questionnaire were unsatisfactory. To overcome this discrepancy, a 3D virtual construction task using Omni-immersion Vision, an online VR construction tool, was added to the reading activity. This let the students express their ideas through multimodal resources including text and images in their stories and their 3D virtual contexts. The results showed that the second group made improvements not only in their English language reading but also in their learning motivation, and they demonstrated lower levels of anxiety than the first group. It appears that a combination of multimodal stories and context construction in virtual worlds benefited EFL learners.