CSIEC (Computer Simulation in Educational Communication), is not only an intelligent web-based human-computer dialogue system with natural language for English instruction, but also a learning assessment system for learners and teachers. Its multiple functions—including grammar-based gap filling exercises, scenario show, free chatting and chatting on a given topic—can satisfy the various requirements for students with different backgrounds and learning abilities. After a brief explanation of the conception of our dialogue system, as well as a survey of related works, we will illustrate the system structure, and describe its pedagogical functions with the underlying AI techniques in detail such as NLP and rule-based reasoning. We will summarize the free Internet usage within a six month period and its integration into English classes in universities and middle schools. The evaluation findings about the class integration show that the chatting function has been improved and frequently utilized by the users, and the application of the CSIEC system on English instruction can motivate the learners to practice English and enhance their learning process. Finally, we will conclude with potential improvements.