The firm is currently testing web browsing on the system using a modified version of Internet Explorer 9, according to reports from The Verge.
Internet Explorer on Xbox 360 will incorporate Kinect for both voice and gesture control. Kinect will not be required, however, allowing users to still browse the web with a standard controller.
Bing voice search is already a part of the Xbox 360 dashboard for Xbox Live media, and is expected to function in much the same way for full web searches with the Internet Explorer app.
Rumours suggest that the next Xbox is already under production, though Microsoft has previously denied reports that it will unveil the console at this year's E3.
Microsoft is also reportedly planning to launch its own Spotify rival music service Woodstock, which it is said will be officially announced at E3 2012 in June.
Microsoft has not announced a launch date for the Internet Explorer app for Xbox 360, nor made an official confirmation. However, with E3 looming less than a month away, an announcement is expected to take place during the show.