A growing temptation in many higher education institutions to move Blended Learning (BL) course offerings towards fully online distance learning programs underlines the immediate and critical need to “get it right” at this stage in terms of providing advanced opportunities for learning – the kinds of opportunities that continue to elude many classic educational settings. Based on much of the current scholarship in applied BL research, current trial and error efforts to improve learning in these new settings are falling short of leading the way to program development. Scholars have argued that such small-scale initiatives fail to provide the basis for a much needed and explicit e-learning theory that institutions can apply on a more general scale. To respond to this call, we report on a two-year longitudinal study we conducted at the micro (student and instructor), meso (Director and coordinator) and macro (institutional) levels of a BL program in a large private-for-profit university in Chile. Convinced of the importance of adopting a sociocultural perspective to move towards e-learning change, our focus was particularly on the perspectives of the BL players at all three levels-and the identities they were mediating. Using a grounded theory methodology within the qualitative research paradigm and an iterative approach to the research design, data was collected and analyzed at all three levels. Data sources involved questionnaires, individual and focus group interviews, field observations, policy documents and reflective journals. The most salient understandings uncovered from the inquiries revealed strengths and gaps in terms of community building, collaborative learning and self-directedness – the essence of any successful learning environment. These findings suggest a practical framework for supporting BL program design and innovation across a plethora of contexts and institutions and we believe bring us a step closer to e-learning theory development.