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This hypergrowth, driven mainly by word of mouth, is now attracting competitors.
South Korea's Cyworld started out as a social-networking site, but has evolved into a two-dimensional equivalent of Second Life, claiming 20 million registered users from Asia to Latin America.
Many people are coupling the Second Life chat technology with Skype, the popular audio Internet software, so they can talk out loud while interacting inside the virtual world.
Richard Branson's Virgin recently announced plans to create its own 3-D community called A World of My Own.
By 2011, four of every five people who use the Internet will actively participate in Second Life or some similar medium, according to Gartner Research, which recently did a study looking at the investment potential of virtual worlds.
Or they use live streaming video to talk and see each other in real life (sitting in front of a computer screen), as well as through their avatars inside Second Life.
"The unique thing about Second Life is that it's immersive," says Michael Rowe, head of IBM's digital convergence team.