This chapter explains the situated nature of human social activity and how this activity can be construed as an integral part of the functioning of communities of practice. These explanations are at the core of the theory of communities of practice (Lave & Wenger, Situated learning: legitimate peripheral participation. Cambridge University Press, Cambridge, 1991). This theory assumes that all human activity is situated and that learning is an inseparable aspect of social practice. Learning is situated in the processes of participation and mutual engagement of human beings in diverse communities’ socioculturally and historically constituted practices. ‘Situated learning’ is the transformative process whereby apprentices engage in ‘legitimate peripheral participation’ in communities of practice, gradually becoming competent participants over time. Communities of practice represent a particular type of ‘apprenticeship system’. As part of these systems, learners interact and engage in social practices in various roles, at multiple levels, and in diverse changing contexts of participation. The chapter further reviews contemporary developments that have extended and applied this theory to explain the functioning of diverse communities of practice. The contributions reviewed in this chapter set the scene for understanding the inner functioning of communities of practice in general and Communities of Dialogic Inquiry in particular, which are centre stage of the present book.