This article presents findings from an exploratory pilot project which aimed at fostering electronic and professional literacy skills of preservice language teachers through computer-mediated peer collaboration. The research context is a qualitative case study involving cooperation via the email and chat functions of FirstClass among preservice teachers at the Justus-Liebig Universität in Giessen and the Pädagogische Hochschule Heidelberg in Germany. The author investigates participants’ prior experiences with regard to computer skills, Internet proficiency, and technology-based language learning and teaching. Next, she discusses benefits and challenges for preservice teachers with respect to collaborating via computers (computer-mediated communication or CMC) with their transatlantic partners. In collecting and analyzing preservice teachers’ reflections, a Grounded Theory approach (Strauss & Corbin, 1998) was used. Instances of electronic and professional literacies were identified and triangulated with data from pre-course questionnaires, post-course self-assessments, logs, email and chat transcripts, and field notes. The author discusses benefits and challenges which preservice teachers encountered through the collaboration. Findings include preservice teachers’ differing levels of electronic literacy skills, tolerance for ambiguity, institutional constraints, peer feedback, and perception of the final product. Based on her findings, the author stresses the need to encourage preservice teachers’ meta-level reflections on the challenges of the collaboration and suggests conducting longitudinal follow-up studies in order to investigate if and how in-service teachers apply the knowledge they gained from their teacher education program to their own teaching.