This paper presents the view that Computer Assisted Language Instruction (CALI) software should be developed as a natural language processing system that offers an interactive environment for language learners. A description of Artificial Intelligence tools and techniques, such as parsing, knowledge representation and expert systems is presented. Their capabilities and limitations are discussed and a model for intelligent CALl software (MICALI) is proposed. MICA-LI is highly interactive and communicative and can initiate conversation with a student or respond to questions on a previously defined domain of knowledge. In the present state of the art, MICALI can only operate in limited parsing and domain-specific knowledge representation.