Virtual teams have been increasingly cited as an efficient and flexible novel form of organisational arrangements affected by the emergence of the electronic business space. The purpose of forming such teams is a new ‘knowledge creation’. The paper argues that unraveling the mystery of knowledge creation processes in virtual partnerships requires an in-depth understanding of the complex interaction processes involved in forming computer-mediated business relationships. The focus, therefore, is on the process of collective ‘knowing’, defined as the team’s actions and interactions embedded in unique social activities in virtual teams, rather than on knowledge being a pre-given resource possessed by the team members. The paper presents the preliminary results of a qualitative research study on seven virtual partnerships and proposes an initial conceptual framework of the knowledge creative processes taking place in virtual business relationships.