This study explores the relationship between group interaction and interlanguage development, specifically listening comprehension and the production of target grammar forms. Two groups (39 participants in total) of first-semester Spanish students at an American university took notes on a mini-lecture, then completed a text reconstruction and listening comprehension test. The experimental group (n = 18) interactively shared notes for five minutes in small groups; the control group (n = 21) did not interact, although students were allowed to study their notes for five minutes. The experimental group scored significantly higher (p = 0.001) on the listening comprehension task. The recorded interactions, analyzed quantitatively and qualitatively, revealed significant differences between the interaction groups in the amount and types of L2 words used in the joint construction of knowledge. Quantitative analysis, conducted by means of a customized computer program that identified and counted target linguistic forms, facilitated ready comparison across interaction groups through innovative analytic techniques. This study shows that interaction may have an effect on listening comprehension and suggests that the different ways in which learners interact may explain this effect.