The concept of collective efficacy within virtual teams has yet to be studied. This study developed and rigorously validated a domain-specific measure of collective efficacy, entitled virtual team efficacy, within a comprehensive research framework. Over a two-year period we collected field study data from multiple samples of information systems project teams--in all, 52 virtual teams comprising 318 students from the United States, Great Britain, and Hong Kong. As we hypothesized, group potency and computer collective efficacy act as antecedents to virtual team efficacy, and virtual team efficacy is in turn predictive of perceptual and objective measures of performance. Further, consistent with efficacy theory, we also find that virtual team efficacy acts on performance outcomes through specific mediating processes. This paper contributes to the academic and practitioner communities by providing a comprehensive model of virtual team efficacy and performance and by providing validated instrumentation that can be immediately applied during further research in this area.