Contemporary virtual worlds provide unique environments in which users may collaborate in the development of shared digital artifacts. However, the ways in which such collaboration takes place is to date under researched. This paper uses an activity theory perspective to analyze the development activities of two communities within the virtual world of Second Life, based on data gathered using ethnographic methods. The study reveals (1) the complimentary and diverging practices utilized by these two different communities of practice, (2) the mediating function of various tools, rules, and work roles in collaborative development activities, (3) the tensions created in such activities and the manner in which users overcome these tensions.