The phenomenon of virtual worlds is changing how humans behave and make sense of the world. Working within the paradigm that all human experience is incarnate, this chapter investigates how the processes of inworld identity construction occur within and in relation to the user's body. Ninoo Nansen, my avatar, is the catalyst for this inquiry. Referring to past ethnographic research in Second Life^TM and drawing on Merleau-Ponty's (The Phenomenology of Perception. In: C. Smith (Trans.). Routledge, London (Original work published in 1945.)) and Sartre's (1968) theories, I utilise phenomenological analysis to interpret the data. This analysis reveals the intentional structure within which identity is formed in the virtual world, differing from how it emerges in the physical world. I initially analyse how a unified, phenomenal I – from which the world is perceived – is formed from the interaction between the user and avatar during the experience of Second Life. I then consider how the encounter with the Other in Second Life modified the pre-virtual and inworld identities.