Research within EFL education highlights specific challenges in fostering critical reading and collaborative learning skills among students, extending to the implementation of Virtual Literature Circle (VLC). Notable issues include persistently low engagement levels and limited participation observed within conventional instructional methods. Moreover, there exists a substantial gap in providing meaningful collaborative learning experiences in English as a Foreign Language (EFL) contexts, emphasizing the need for alternative approaches. This study investigated the impact of VLC within a Critical Reading class tailored for EFL students. Through a sequential explanatory mixed-methods design involving a cohort of 25 EFL students at STKIP PGRI Sidoarjo, the study examined their engagement with VLC and subsequent skill development. The findings revealed promising advancements, with students demonstrating increased engagement and active participation during VLC sessions. Additionally, students reported enhanced critical reading skills and a deeper understanding of literary texts through collaborative discussions within VLC. However, challenges persist, including the importance of diversified group dynamics, structured facilitation, and support mechanisms. Notably, students expressed a preference for the collaborative learning format facilitated by VLC over traditional instructional methods. These findings underscore the critical importance of VLC in addressing challenges and enhancing collaborative learning experiences for EFL students.