We propose a practice-based focus for professional learning communities in schools. We start with a brief historical review of the approaches that have deemed peer collaboration as crucial for school improvement and explore how teachers' practices have been characterised in past reform initiatives. Second, we highlight the importance of "teacher agency" within professional learning communities. Third, we point out how a theory of situated cognition provides a robust epistemological framework for professional learning communities. Finally, we argue that a "situated" account of teachers' agency and professional learning will improve our understanding of peer collaboration initiatives and educational reform in general.