Dialogues are fundamentally driven by xu (C. Wang, 2016, 2017), a Chinese word meaning continuation that captures the process in which interlocutors participate in interaction through the actions of (utterance) completion, (content) extension, and (topic) creation (CEC). This article reports a conversation analytic case study designed to investigate how the continuation strategies of CEC are used in real-time communication to achieve mutual understanding, and thus to construct intersubjectivity (Verhagen, 2005) and promote the development of second language (L2) interactional competence. Our data consisted of audio and video recordings of a 25-minute conversation between two L2 English speakers, one expert and one novice, and a stimulated recall interview with them. Results revealed that the expert employed CEC at the early stage of interaction to maintain successful communication, and the novice gradually aligned with the expert and used CEC to achieve mutual understanding, construct intersubjectivity, and create opportunities for interaction and learning at the late stage, displaying her development of L2 interactional competence. Our findings have useful implications for theoretical and methodological development of the xu-argument studies as well as for xu-based L2 pedagogy.