Emerging virtual worlds, such as the prominent Second Life, offer unprecedented opportunities for companies to collaborate with co-creating users. However, pioneering corporate co-creation systems fail to attract a satisfying level of participation and engagement. The experience users have with the co-creation system is the key to making virtual places a vibrant source of great connections, creativity, and co-creation. While prior research on co-creation serves as a foundation for this work, it does not provide adequate guidance on how to design co-creation systems in virtual worlds. To address this shortcoming, a 20-month action research project was conducted to study the user’s experience and to identify design principles for virtual co-creation systems. In two action research cycles, a virtual co-creation system called Ideation Quest was created, deployed, evaluated, and improved. The study reveals how to design co-creation systems and enriches research on co-creation to fit the virtual world context. Practitioners receive a helpful framework to leverage virtual worlds for co-creation.