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The spread of the Internet in advanced Western countries has been rapid and uneven, resulting in some alarming diagnoses of a 'digital divide': an allegedly widening gap between those with access to information and communication technologies and the accompanying advantages, and those without access. However, these diagnoses of a 'digital divide' are seldom based on comprehensive analyses of the new information and communication technologies and their social diffusion. This study analyses the diffusion of the Internet in Australia within a broad theoretical framework covering technological and social change associated with diffusion of the Internet, and especially the changes in social hierarchy and privilege. The study is based on empirical analysis of Australian survey data on Internet use and on in-depth interviews of Internet users. The principal focus is a critical evaluation of the 'digital divide' thesis: the study considers the pattern and dynamics of Internet diffusion in Australia, the main social correlates of Internet adoption and use, and the social impacts of differential Internet use on the distribution of advantage and disadvantage. Although the study considers the process and consequences of Internet diffusion in Australia, the results can be generalised to other advanced societies in which Internet diffusion follows a similar pattern. The main findings of this study contradict the popular conceptions of a 'digital divide' in Internet use in Australia. Internet use is becoming more widespread in Australia, with current patterns of use now crossing the boundaries between occupational classes, gender, and age groups. There is little evidence of any social 'divide' forming or any significant accumulation of privilege and disadvantage around Internet use. However, inequalities in access to the Internet, and the related advantages, persist on the basis of age, gender, education, income and occupational class, although they resemble 'digital stratification' rather than a 'digital divide'. Further, the analyses of Internet practices reveal the key roles of cultural, social and economic capital in distributing advantages associated with Internet-related activities in both the workplace and the home.Cultural capital in particular appears as a central stratifying factor. Diffusion of the Internet occurs primarily within specific (techno) habitus, but also crosses between habitus along the lines marked by the dispersion of cultural capital.