Virtual teams (VTs) are groups in organizations separated by organizational, spatial and/or temporal distance. Innovative information technology infrastructure coupled with the growing internationalization of commercial activity has augmented the need for VTs. But not all VTs are equally virtual. A VT’s environment, characterized by the pressures the team experiences to collaborate, the inherent orientation towards collaborative work and the drive to use technology, together influence the degree of virtuality of a VT. This paper proposes two dimensions of degree of virtuality including scale and sophistication corresponding to quantity and quality of use of VT technology, thus creating a ScaSo matrix. The paper presents propositions describing the influence of various factors in the VT environment on the degree of virtuality. Such factors include information intensity, performance pressures, group culture, leadership orientation, IT orientation and organizational IT maturity. The paper concludes with implications and proposal for further research.