The recent years have witnessed striking global demographic shifts. Retired elderly people often stay home, seldom communicate with their grandchildren, and fail to acquire new knowledge or pass on their experiences. In this study, digital technologies based on virtual reality (VR) with tangible user interfaces (TUIs) were introduced into the design of a novel interactive system for intergenerational learning, aimed at promoting the elderly people’s interactions with younger generations. Initially, the literature was reviewed and experts were interviewed to derive the relevant design principles. The system was constructed accordingly using gesture detection, sound sensing, and VR techniques, and was used to play animation games that simulated traditional puppetry. The system was evaluated statistically by SPSS and AMOS according to the scales of global perceptions of intergenerational communication and the elderly’s attitude via questionnaire surveys, as well as interviews with participants who had experienced the system. Based on the evaluation results and some discussions on the participants’ comments, the following conclusions about the system effectiveness were drawn: (1) intergenerational learning activities based on digital technology can attract younger generations; (2) selecting game topics familiar to the elderly in the learning process encourages them to experience technology; and (3) both generations are more likely to understand each other as a result of joint learning.