We study actions of compact quantum groups on type I -factors, which may be interpreted as projective representations of compact quantum groups. We generalize to this setting some of Woronowicz's results concerning Peter-Weyl theory for compact quantum groups. The main new phenomenon is that for general compact quantum groups (more precisely, those which are not of Kac type), not all irreducible projective representations have to be finite-dimensional. As applications, we consider the theory of projective representations for the compact quantum groups associated with group von Neumann algebras of discrete groups, and consider a certain non-trivial projective representation for quantum SU(2).It is well known that for compact groups, one can easily extend the main theorems of the Peter-Weyl theory to cover also projective representations. In this article, we will see that if one tries to do the same for Woronowicz's compact quantum groups, one confronts at least one surprising novelty: not all irreducible projective representations of a compact quantum group have to be finite-dimensional. On the other hand, one will still be able to decompose any projective rep-