IntroductionOver the past two decades, there has been a huge increase in the number of international students enrolled in Australian universities. From a small base, enrolments grew 1,041 per cent between 1980 and 1999 (Welch, 2002, p. 442). There has been a strong financial imperative for this growth; as Welch (2002, pp. 443-444) points out, the rise in international student numbers has accompanied, and been at least partly driven by, a dramatic decline in federal funding for higher education in Australia. But the benefits of increasing internationalisation for the staff and students of Australian universities as well as for the Australian community more generally are manifold. In an increasingly globalised job market, exposure to diverse social and cultural contexts enables students to develop skills, attitudes and outlooks that will stand them in good stead in their professional lives (McLoughlin, 2001, p. 11; Rizvi, 2000, p. 223). Further, evidence suggests that diverse learning environments facilitate learning (Boylan, 2002; McLoughlin, 2001). Perhaps even more importantly, the of international students can transform local communities. As Rizvi argues, Their contributes to the creation of 'in-between' cultural spaces not bounded by the dictates of geography. They reconstitute localities by their mere presence (2000, p. 209).The growth in international student numbers has particularly powerful implications for Australia's regional universities, both in economic terms, as a means of surviving government funding cuts to higher education, and in social and educational terms. Traditionally, regional universities have understood their identity and mission specifically in terms of local and regional students. The commitment of many such institutions to distance education has reflected this conception of their identity and mission as providers of higher education to people in remote and regional areas. But the growth in international student numbers has expanded that identity and mission exponentially. 'Town and gown in the bush' no longer refers solely to the relationship between a regional university and the local communities in which it physically operates but encompasses communities- both metropolitan and regional - in other nations. This expansion of the way that regional universities conceive of themselves is necessary for their economic survival. But it also offers and unique opportunities for these institutions to transform both their traditional local communities and the communities with which their international students bring them into relationship.Currently, however, the full potential of such transformations is not always being realised. In a number of regional institutions, international students are geographically removed from the local students of their own institution. Concentrated in purpose built campuses in metropolitan areas, international students have often only a shadowy in the regions. This means that the experience of internationalisation is limited for both Australian regional and (to a lesser extent) international students, and the potential for the participation of regional students, in particular, in what Rizvi (2000, p. 223) calls a new global generation is curtailed. Use of the Internet, however, can foster collaboration among culturally diverse individuals (Burbules, 2000; McLoughlin, 2001; Welch, 2002). This paper argues that the use of the Internet in teaching and learning has the potential to bring local and international students together in learning communities in which not only knowledge but also identities can be constructed and reconstructed through meaningful collaboration. The use of the Internet does not in itself guarantee such collaboration; a focus on educational, rather than economic, imperatives and the use of a dialogic rather than a didactic approach to online teaching and learning are also required. But the result-the creation of virtual learning communities that bring together local and international students-has the potential to subvert the global-local dichotomy. …