Using short stories has proven effective in second language learning and teaching. This study investigated the students’ perceptions of the use of short stories and their English proficiency. It was intended to identify the students’ benefits from using short stories and the challenges they encountered, as well as solutions to address them. The study targeted 1050 first-year students at the University of Rwanda, College of Business and Economics. The sample size was 222 students from the departments of Business and Information Technology (BIT) and Applied Statistics. This study was supported by the constructivism theory. The study adopted a descriptive approach, and data were collected through a questionnaire and focus group interviews. The questionnaire yielded quantitative data, whereas the focus group interviews generated qualitative data. Findings revealed that using short stories enabled students to develop the English language's four macro-skills, namely listening (94.6%), speaking (95.5%), reading (98.2%), and writing (95.9%). The findings also disclosed that short stories helped to increase students’ vocabulary (98.2%). However, the findings indicated that students had difficulties grasping conveyed messages because of limited vocabulary, spelling difficulties, and little knowledge of English tenses, and that they lacked confidence to present their stories in front of colleagues. They could overcome these challenges, though, by looking up the meanings of new words and scaffolding each other’s learning. The study concluded that short stories might be useful language materials and recommended them as adequate materials to mediate second language learning.