The aims of this research are (1) to find out whether Project-Based Learning (Digital Storytelling) can improve students’ speaking skill and (2) to analyze the students’ learning motivation when Project-Based Learning (Digital Storytelling) is implemented in the classroom. This research was conducted at class X MIA 4 SMA N 1 Karanganyar consisting of 36 students. The method of this research was Classroom Action Research and it was conducted in two cycles from August 13th to November 19th 2014. Each cycle covered planning, implementing, observing, and reflecting. In collecting the data, the resercher used observation, interview, questionnaire, and test. Having collecting the data, the researcher analyzed quantitative and qualitative data. The quantitative data were analyzed by using descriptive statistics. It compared between the mean score of pre-test and post-test 1 dan 2. The qualitative data were analyzed by using Constant Comparative Method which consisted of comparing incidents applicable to each category, integrating categories and their properties, delimiting theory, and writing the theory. The findings of the research showed that (1) Project-Based Learning (Digital Storytelling) can improve the students’ speaking skill in terms of: (a) students’ understanding about grammar improved, (b) students’ vocabulary increased, (c) some students could pronounce words better, (d) the students became more fluent in speaking, (e) the students became more confident to speak. The means of students’ score improved from cycle to cycle. The mean score in pre-test: 56.55, post-test 1: 71, post-test 2: 78.88 compared with KKM for speaking: 75. (2) Project-Based Learning (Digital Storytelling) can increase students’ learning motivation in terms of: (a) the students invest more effort in the learning, (b) the students looked more interested in the learning activity, and (c) the students’ attitude became positive. They enjoyed the learning process. Based on the finding of the research, it is suggested that when implementing Project-Based Learning (Digital Storytelling) to teach speaking, the teacher should draw an accurate design for the project and improve the modern technology use in the classroom. Project-Based Learning (Digital Storytelling) is recommended method to overcome students’ problem in learning speaking and student’ low learning motivation.