A situated Chinese cultural festival learning system based on motion sensing is developed in this study. The primary design principle is to create a highly interactive learning environment, allowing learners to interact with Kinect through natural gestures in the designed learning situation to achieve efficient learning. The system has the following characteristics: the learning activities and contents are designed according to the key elements of situated learning theory; the system combines augmented reality with a real environment to provide story-based learning situations for learners. The Lantern Festival is used as the learning objective of this study, and 74 students from four third to fourth-grade level classes at Shanhua Elementary School in Tainan City were recruited as the study participants. In the experiment, the students were divided into a control group receiving traditional teaching and an experimental group that employed the system developed in this study. To assess the proposed system, questionnaire analysis and learning achievement assessment were conducted. The questionnaire includes situated learning, learning materials and operating interaction. The learning achievement was assessed by using the t-test for pre-test and post-test. The experiment shows that the system can indeed enhance users’ learning interest and outcomes.