This paper develops and offers the theory of embodied social presence (ESP). The paper reviews the literature on place and space, presence, and embodiment and demonstrates that the role of the body as a focal point for action during social interaction in multi-user virtual environments has been largely overlooked. We draw on Activity Theory to frame our model of embodied social presence. Activity Theory proposes that a learner (i.e., a social actor in a virtual environment) derives meaning during interactions with his or her environment through actions, context, and tools and that people perceive reality both as objective (i.e., existing without them) and as socially constructed i.e., (existing within them). Embodied Social Presence Theory focuses on the virtual body (i.e., the avatar) as the nexus of activity in social interaction within virtual environments and we explore the implications of this focus on how actors derive meaning and understanding during social interaction. The paper concludes with a discussion of Embodied Social Presence Theory and implications for future research and practice.