The purpose of this thesis is to examine challenges faced by students and teachers at small rural schools, and explore how these may be alleviated by collaborative practice between schools in virtual learning environments. The design of this research is situated within an interpretivist framework and influenced by critical theory, as my research question seeks solutions to challenges that small rural schools face. Research participants were teaching principals selected from eight small rural New Zealand primary schools who were all active in Virtual Learning Network (VLN) Primary School online programmes, and so had current experience of collaborating, and teaching and learning online. Participants took part in focus group interviews, with two being interviewed individually a second time. A grounded theory method of inductive analysis was used throughout the research process to generate findings from the data. I found that there are many challenges in being a principal in a small rural school in New Zealand, but when principals work collaboratively across schools they can relieve some of those challenges and provide benefits for their students and themselves. Challenges for principals of small rural primary schools were identified as staffing difficulties, high workload, lack of time and access to professional learning and development, resources and support. These challenges were often compounded due to these schools being relatively small and geographically isolated. The participant’s’ experience of collaborating online highlighted a wide range of benefits for both themselves and their students, in providing access to a wider curriculum, developing digital fluency, reducing professional isolation and relieving workload. Throughout this study the unique nature of rural education was highlighted, with rural schools being acknowledged as providing a vital role in strengthening rural communities. Recommendations are made to schools on how they can move towards learning in a collaborative online environment; and to government on how they can develop policy and provide resourcing to support small rural primary schools. With fast reliable internet, the small rural school that is open, networked and collaborative can increase its capacity to provide learning opportunities for both students and teachers.