In this paper, we develop an understanding of how virtual teams develop over time by inductively studying communication transactions of 12 United States-Canadian student virtual teams involved in ISD. Our analysis is based upon two influential streams of social science research: (1) interaction analysis, which aided in the examination of the micro-processes of communication among members of a virtual team, and (2) structuration theory, which provided a meta-framework to help link the microlevel communication patterns with the more macro-structures representing the environmental context as well as the characteristics of teams over time. Based on our interpretation of the communication patterns in the virtual teams, we propose a theoretical model to describe how virtual teams develop over the life of a project, and also attempt to clarify how the concepts of communication, virtual team development, and collaboration are related.