The promise of computer-mediated communication (CMC) to reduce intergroup prejudice has generated mixed results. Theories of CMC yield alternative and mutually exclusive explanations about mechanisms by which CMC fosters relationships online with potential to ameliorate prejudice. This research tests contact-hypothesis predictions and two CMC theories on multicultural, virtual groups who communicated during a yearlong online course focusing on educational technology. Groups included students from the three major Israeli education sectors—religious Jews, secular Jews, and Muslims—who completed pretest and posttest prejudice measures. Two sets of control subjects who did not participate in virtual groups provided comparative data.