The OLE-Nepal project has deployed over 6,500 XO laptops in schools in Nepal, pre-installed with materials designed to support the national curriculum. This has raised hopes that technology can transform the quality of education available in remote regions. In order to investigate if and how the technology can have this impact, a case study was carried out which gathered detailed data on the use of the computers in three schools in contrasting remote rural areas of Nepal. The principal data collection methods were interviews, focus groups, classroom observations, and questionnaires. The results show that the effectiveness of technology in transforming schools is strongly dependent on local conditions and practices. This paper identifies constraining and enabling factors which can be identified in the case study data: infrastructure, classroom management, gender, and teacher motivation and training.