This experimental study investigates the effects of task-based synchronous computer-mediated communication (CMC) on learners' negotiation of meaning during online chat sessions and on learners' development in second language (L2) vocabulary. More specifically, this study attempts to address (a) whether a synchronous CMC task seeded with largely unknown vocabulary elicits a greater amount of negotiation than the amounts documented in prior CMC research, (b) How learners carry out computer-mediated negotiation in performing this task and, (c) whether these negotiation facilitate mutual comprehension and retention of the new lexical items. Data analyses and results based on the chat logs produced by 20 ESL learners collaborating on an information gap task through the Chat feature of the learning management system Moodle suggest that synchronous CMC tasks that aim for discussion over unfamiliar vocabulary triggered more negotiation between L2 learners. A detailed examination of these negotiated exchanges also indicates that the split nature of computer-mediated negotiation did not seem to affect the completeness of the negotiation routines that learners need to go through to gain a full understanding of the target vocabulary. However, the electronic medium in which negotiated interaction occurred was very likely to impact on the discourse features of negotiation of meaning. On the other hand, learners' discussion of lexical problems appeared to promote their comprehension and retention of the target lexical items. Although variations in language complexity, successful task completion and L2 word recognition have been identified with learners at different levels of English proficiency, it is reasonable to assume that online chat, as a potential pedagogical tool, can serve as an interactive platform for learners to communicate in a meaningful context, receive feedback and improve their interlanguage.