Literature instruction may serve multiple functions. This case study aimed at investigating the perceptions on the use of online literature circles among 62 first year Teaching English as a Second Language pre-service teachers in a literature course at Universiti Teknologi Malaysia. The participants were assigned to read and participate in online literature circles about the play Hamlet by William Shakespeare. Based on cooperative learning, the participants rotated in playing the roles of the Discussion Director, Device Detective, Imaginative Illustrator, Creative Connector, and Passage Picker in each group. Data from a survey were analyzed in descriptive statistics, while data from the role sheets based on the five roles and the online video of 3 literature circle discussions were analyzed thematically. The findings are significant for teacher training institutions and in-service teachers. This study was able to show that online literature circles were perceived as interesting, engaging, challenging, and fun. The participants engaged in different learning processes involving cognitive, affective, and language skills. Though this study identified some challenges, online literature circles have many benefits and are recommended for literature instruction for pre-service teacher training.