Prepared for presentation at the 15th Conference of Commonwealth Education Ministers, in Edinburgh, Scotland, this report describes a proposal, created by the Commonwealth of Learning at the request by the Commonwealth Ministers of Education, to explore the creation of a virtual university to support higher education in small states. A Technical Advisory Committee (TAC) was established to assist with the process of developing the recommendations. This report is based on their work. The vision that emerged for a virtual university serving small states was one of a consortium of institutions, enabled by appropriate ICT applications, working together in practical ways to plan programs, develop the required content and ensure the delivery of those programs and support services to learners. The virtual university is as much concerned with "adding value" to conventional on-campus instruction as it is with serving learners at a distance. Contents of this report include: (1) Introduction; (2) Present Context of Higher Education in Small States; (3) Development of Virtual Education: A Work in Progress; (4) Analysis; (5) A Proposal for a Virtual University for Small States; (6) The Benefit; (7) Governance; and (8) Action Plan. Appended are: (A) Small States of the Commonwealth; (B) Membership of the Technical Advisory Committee; (C) Communique by Ministers of Education; (D) Learning Objects and their Attributes (David Porter, David Porter and Associates). and (E) Costing Mode.