The research project, UK Children Go Online (UKCGO), is conducting a rigorous investigation of 9-19 year-olds' use of the Internet, comparing girls and boys of different ages, backgrounds, etc., in order to ask how the Internet may be transforming, or may itself be shaped by, family life, peer networks and school. It combines qualitative interviews and observations with a major national survey of 9-19 year-olds (n = 1511) and their parents (n = 906). This article focuses on two of the key opportunities the Internet affords to children and young people: first, education, informal learning and literacy and, second, communication and participation. While education and learning represent the "approved" uses of the Internet, which is often the reason for which parents and governments invest in domestic Internet access, children and young people themselves are far more excited by the Internet as a communication medium. However, not all the opportunities available to children and young people are being taken up equally. Hence the article concludes by charting the emergence of a new divide, signaling emerging inequalities in the quality of Internet use, with children and young people being divided into those for whom the Internet is an increasingly rich, diverse, engaging and stimulating resource of growing importance in their lives, and those for whom it remains a narrow, unengaging if occasionally useful resource of rather less significance. (Contains 1 table, 10 figures and 1 note.)