Packaged software development (PSD) is largely a knowledge-intense activity. Thus, it depends on the organizational capability of developing and combining market and technical knowledge into timely and competitive software products. Given customers’ situated knowledge of the software, software firms increasingly seek new ways to involve customers in their software development activities. As highlighted in the literature, one path for doing this is to use online communities. However, there exists little empirical research that examines the role that communities can play in the commercial endeavor of PSD. To address this omission, this paper examines the benefits and limits of online community use in PSD as it unfolds at the intersection between commercial software firm practices and voluntary community participation. On the basis of this examination, the paper presents implications for both research and practice.