Trust and conflict are inherent issues of any organizational arrangement and central for knowledge sharing; yet they have received limited attention in the literature. In this paper, we undertake an investigation of both phenomena within the context of virtual alliances. A generic framework for understanding the dynamics of trust and conflict within the context of virtual inter-organizational arrangements is presented, followed by an examination of three distinct structural forms of virtual alliances, and strategies for generating trust and minimizing dysfunctional conflict. The paper concludes with an identification of avenues for further research.