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This article reports on a small-scale investigation into the use of Internet chatrooms by teenage girls. Based on interview and observational data, it illustrates how the use of popular electronic communication is resulting in linguistic innovation within new, virtual social networks in a way that reflects more wide-reaching changes in the communication landscape. The paper suggests that teenagers and young people are in the vanguard of these processes of change as they fluently exploit the possibilities of digital technology, radically changing the face of literacy. The study looks at teenagers’ perceptions of chatroom encounters and their learning about new ways of social and linguistic interaction. Observations of teenagers online show how rapid written conversations which combine features of face-to-face talk with explorations in interactive writing and the exchange of additional digital information, such as image files and web addresses, are enabling these young people to develop sophisticated and marketable skills. These innovations are contrasted with recent media and educational criticism of the language use associated with new technology. This tension between change and conservatism is explored by applying Bourdieu’s concept of ‘linguistic capital’.