This discussion paper explores the possibilities and risks that data linkage presents for the vocational education and training (VET) sector. Along with a broad overview of the nature of data linkage, it highlights possible applications for data linkage in the VET sector and examines the key challenges associated with its use. A number of case studies are reviewed to illustrate the advantages data linkage can offer, as well as the challenges that may arise. In order to better understand the options for data linkage from an education and employment perspective, a 'map' of relevant Australian datasets is presented, along with a list of data sources that may be of use to VET research. As well as selected Australian datasets, the paper reviews some international datasets of potential interest for VET research in Australia. Using the insights gained from past data-linkage projects and taking into account the privacy and ethics concerns, the paper presents a set of six principles for data linkage. These principles provide researchers with basic steps for guidance when embarking upon a data-linkage project. Finally, future directions for data linkage in VET research are explored.