The computing giant launched a preview of is Skype Translator project today, with the first iteration supporting English and Spanish.
"Our long-term goal for speech translation is to translate as many languages as possible on as many platforms as possible and deliver the best Skype Translator experience on each individual platform for our more than 300 million connected users," the company said in a blog post.
The program relies on machine learning, which means the more people use it, the smarter and more precise it will get.
A video demonstration showed two students -- one in the United States, one in Mexico, using the software to have a conversation in their native languages.
When the American girl said something in English, a computer generated translation would ask the girl in Mexico in Spanish, and vice versa.
The translations happen in near-real time, making it easy to carry on a conversation, despite differences in language and geography.
The preview program is available here to users of Windows 8.1 and the Windows 10 technical preview.
Steve Clayton, the chief storyteller at Microsoft, told ABC News earlier this month that Skype Translator is one of his "dream" projects.
"My mother-in-law is Chinese. In the 25 years I have known her, we've exchanged about six words," he said.
"My dream feature is to get to speak to my mother-in-law, which some people wouldn't say is a dream feature," he quipped. "But for me, it turns out it is a dream feature."