The purpose of this research is to develop a grounded theory model to explain the factors influencing collaborative learning in higher education, the role of technology in facilitating collaboration, and the outcome of collaboration. We assigned 28 participants to small groups to work on course-related questions; half of the groups were face-to-face groups and the other half groups were collaborating in a simulated virtual environment with the aid of information technology. Interview data was collected and analyzed following the grounded theory approach. Congruent with distributed cognition theories, the results of our study suggest that both social and technological factors were important and interlocking. We also discussed the importance of designing learning technologies that have strong social and communications features.