Agile distributed Information Systems Development (ISD) is an innately social process in which distributed team members must continuously interact to develop new IT solutions. Existing literature suggests that shared understanding and shared commitment are essential for the effective functioning of agile distributed ISD project teams; however, the factors that shape the emergence of these two phenomena remain elusive. In this paper, we seek to develop a framework for investigating the interplay of factors that shape shared understanding and shared commitment during agile distributed ISD project team interactions. We draw on in-depth case study findings from an agile distributed ISD project called the “CHP project” which involved team members from diverse backgrounds such as academia, healthcare, and industry. The study reveals that shared understanding and shared commitment in agile distributed project teams are shaped by the dynamic interplay between macro-level (contextual) and micro-level (localised) factors. In particular, we find that diverse macro-level structures, identities, and cultures interplay with the micro-level vision, approach, and means of the project to impact shared understanding and shared commitment. Empirical findings also suggest that the absence of shared understanding and shared commitment can sometimes be constructive as conflict allows team members to air differences of opinion