Originally, agile information systems development (ISD) methods such as Scrum are intended for colocated teams. Recent research efforts provide initial evidence of the applicability of Scrum in distributed environments. What is missing so far, however, are theoretical conceptualizations that explain these findings as well as confirmatory studies that validate those exploratory results. We address this gap by investigating the influence of team distribution on project success, with a focus on shared understanding. Drawing on Shared Mental Models Theory, we investigate the building and maintaining of shared understanding among team members. We conducted a field study in a software product development company and employ a quantitative survey design, which is complemented by seven semistructured interviews. We find that the level of team distribution does not moderate the highly significant effect of shared understanding on project success. We consult our qualitative data to provide explanations for this surprising finding.