Research problem: The project management of virtual teams differs from that of traditional ones. Traditional project risks, such as complexity, the uncertainty of factors influencing the project, and the high interdependency of project tasks must be managed alongside changed temporal, geographic, and cultural dimensions. Only a few studies have investigated the effect of critical technological issues, such as wrong tool selection or limited internet access on performance as well as team and team member satisfaction in virtual work settings. Research questions: How do critical technology-related issues concerning the selection and use of web-based tools influence the performance and satisfaction of virtual project teams? Literature review: Instead of categorizing virtual teams as a type of team that contrasts with traditional or face-to-face teams, the focus has shifted to virtualness as a characteristic present in all teams. Project teamwork is often integrated in university degree programs in order to prepare students appropriately for real-life projects. While these student teams are often not geographically spread across countries, they have a high degree of virtualness because of their diverse team composition, the necessity for working at different places, and the limited face-to-face meeting opportunities. Performance, effectiveness, and satisfaction are central issues in the evaluation and measurement of project teams: Team performance is often evaluated on the basis of acceptance of a specified output by a customer. Through specific mediating processes, team performance can alternatively be assessed by inquiring the team's perception on their performance. Effectiveness can be defined as the achievement of clear goals and objectives and it is often related to the team's performance. Finally, satisfaction can be defined as having three dimensions—satisfaction with the team, the satisfaction of meeting customer needs, and general satisfaction with ex- rinsic rewards and work. Technology use is substantial for distributed teamwork and can be assessed by the extent to which it supports communication, collaboration, and project-management tasks. Methodology: Fifteen teams were observed and interviewed over a two-year period. The resulting data were analyzed using a Grounded Theory approach, which revealed how the selection and use of tools for communication, collaboration, and project management in the different project activities influenced the team's performance. Results and conclusions: Our results contribute to practice by providing a number of guidelines for the management of virtual teams as well as knowledge required by companies wishing to launch projects with virtual teams. Differing performances of teams can, in many cases, be attributed to such conditions as: internet availability and bandwidth; lack of training for certain tools; the selection and appropriate use of tools; integrated tool support for task management; as well as the promotion of transparency about progress made. It was found that restrictions in internet access of even a single member within a team limited the team's technological choices, which affected the team's performance.