Abstract: COMMONS-BASED peer production is a socio-economic system of production that is emerging in the digitally networked environment. Facilitated by the technical infrastructure of the Internet, the hallmark of this socio-technical system is collaboration among large groups of individuals, sometimes in the order of tens or even hundreds of thousands, who cooperate effectively to provide information, knowledge or cultural goods without relying on either market pricing or managerial hierarchies to coordinate their common enterprise. While there are many practical reasons to try to understand a novel system of production that has produced some of the finest software, the fastest supercomputer and some of the best web-based directories and news sites, here we focus on the ethical, rather than the functional dimension. What does it mean in ethical terms that many individuals can find themselves cooperating productively with strangers and acquaintances on a scope never before seen? How might it affect, or at least enable, human action and affection, and how would these effects or possibilities affect our capacities to be virtuous human beings? We suggest that the emergence of peer production offers an opportunity for more people to engage in practices that permit them to exhibit and experience virtuous behavior. We posit: (a) that a society that provides opportunities for virtuous behavior is one that is more conducive to virtuous individuals; and (b) that the practice of effective virtuous behavior may lead to more people adopting virtues as their own, or as attributes of what they see as their self-definition. The central thesis of this paper is that socio-technical systems of commons-based peer production offer not only a remarkable medium of production for various kinds of information goods but serve as a context for positive character formation. Exploring and substantiating these claims will be our quest, but we begin with a brief tour through this strange and exciting new landscape of commons-based peer production and conclude with recommendations for public policy.