This paper reports on a research project about the emerging hybrid or blended learning and teaching environments. These new environments result from the introduction of new technologies (e.g. 'Blackboard' learning and teaching systems) into the educational setting. The new technologies, rendered as innovative tools in the education sector, have helped integrate the classroom and online learning environments into a variety of "productive spaces" referred to by researchers as "the third space" [1]. This research project has explored the major issues arising in this "third space" in a higher education institute in Hong Kong. These issues include 1) the relationship between the traditional knowledge transmission and the current technology-enhanced knowledge generation in education; 2) the changing relationship between the teachers and the students in the new learning and teaching environments; 3) the discourse nature of interactions through differing modes, e.g. face-to-face (FTF), and interactive electronic media. In addition, this project has also addressed, through a case study of two courses offered in the blended mode, the issues concerning the context and content of the two courses, and the opinions of the participants of these two courses towards the new learning and teaching mode.