With the increase in e-learning platform usage and the accessibility of character-creation tools, this paper reviews the literature on the intersection of avatars, e-learning, and identification effects. Following a thorough search across three selected index databases, the authors present and categorize thirteen papers to address research questions concerning the manifestation of identification effects in e-learning and avatars’ effectiveness. Additionally, it seeks to understand the tools, methodologies, and research practices essential for comprehending and advancing research on this multidisciplinary topic. The literature reveals that students are susceptible to identification effects on e-learning platforms. Furthermore, the literature showed a student preference for engaging with positive and attractive pedagogical agents and indicates that knowledge acquisition is best when a pedagogical agent exhibits natural, human-like movements. The review also highlights that tools like the Nintendo Mii character creator and some artificial intelligence tools are valuable in researching pedagogical agents.