With the exponential growth in desktop computing power and advancements in Web-based technologies over the past decade, the virtual community is now a reality. The latest derivative of the virtual community, made possible by 3D avatars, is called the collaborative virtual environment (CVE). These CVEs often provide “fantasy-themed online worlds” for participants to socially interact. Instead of placing emphasis on teamplaying, the sharing of information, and collaborative activities, a CVE focuses on social presence and communication processes. Unlike virtual environments which allow participants to discuss what is going on in the real world, the participants’ experiences of the virtual world provided by the CVE are often the main topics for discussion. These CVEs, just like their real counterparts, have their own issues and problems. This article will analyze the potential benefits of avatars, helping to build virtual communities and explore the possible issues that are associated with the CVE.