The focus of the action research reported here is on how leaders and teachers used teamwork in developing a professional learning community in a new compulsory school in Iceland. Collaboration is a critical issue in schools as it can improve practice that supports student achievement. Results from the TALIS 2008 study show that Icelandic teachers are below international averages regarding joint teaching and supporting each other. Findings from this action research study showed signs of an emerging collaborative structure among some teams but also a lack of feedback among peers. Teachers expressed difficulty in putting into practice their growing sense of professionalism. The research findings suggest that peer coaching should be supported to encourage staff to engage in critical reflection and transforming practice.