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Abstract In this article, we present a live speech-driven, avatar-mediated, three-party telepresence system, through which three distant users, embodied as avatars in a shared 3D virtual world, can perform natural three-party telepresence that does not require tracking devices. Based on live speech input from three users, this system can real-time generate the corresponding conversational motions of all the avatars, including head motion, eye motion, lip movement, torso motion, and hand gesture. All motions are generated automatically at each user side based on live speech input, and a cloud server is utilized to transmit and synchronize motion and speech among different users. We conduct a formal user study to evaluate the usability and effectiveness of the system by comparing it with a well-known online virtual world, Second Life, and a widely-used online teleconferencing system, Skype. The user study results indicate our system can provide a measurably better telepresence user experience than the two widely-used methods.