Facebook is a frequently used Computer Mediated Environment (CME) for students and others to build social connections, with identities and deposited self-expression. Its widespread use makes it appropriate for consideration as an educational tool; though one that does not yet have clear guidelines for use. Whether a social networking site can be used for educational objectives remains largely unexplored as a research question. This paper discusses a study conducted at the University of Auckland and at Manchester Metropolitan University on how their students use Facebook, and its impact on their social and academic lives. Using theories of social capital and knowledge management, we explore some potential educational uses of Facebook. Guidelines are included for the educational use of Facebook by tutors in a university environment. These include both positive recommendations and activities and approaches to avoid; and include educational, administrative and legal issues.