This study investigates the use of virtual reality (VR) as a pedagogical tool to foster English narrative competence and empathy among nursing students in an English as a Foreign Language (EFL) context. Through a 16-week course-integrated intervention, 98 third-year nursing students in a five-year associate degree program at a junior nursing college participated in a co-creation project using CoSpaces Edu to collaboratively design immersive, first-person 3D narratives based on an end-of-life care scenario. The project aimed to develop students’ linguistic skills while promoting humanistic understanding through perspective-taking. Employing a mixed-methods design, the study incorporated pre- and post-intervention vocabulary tests, oral narrative evaluations, student reflections, and interviews. Results demonstrated significant gains in English vocabulary and narrative expression, increased oral confidence, and evidence of enhanced empathy as students adopted diverse character roles in their digital stories. The findings underscore the pedagogical affordances of VR-based co-creation in EFL instruction for healthcare students, revealing how immersive storytelling can bridge language learning with humanistic nursing education. Implications for XR-enhanced language education and interdisciplinary curriculum design are discussed.