The issue of inter-ethnic relations is of significant concern in Malaysia because it is often regarded as a threat to national unity and the welfare of the people. For a long time, the Government has been making great efforts to overcome this problem. However, tension and division remain a major concern. In 1996 the Malaysian government established the National Information and Communication Technology (NICT) policy intended to transform Malaysia into an information and knowledge society. The implementation of the policy has been interpreted as part of the policy to overcome ethnic segregation through encouraging the development of online communities. The aim of this paper is to discuss how online communities have contributed to the generation and maintenance of social capital and social integration. The research explores the experience of 162 online community members. The findings suggest that the online communities in Malaysia do have the potential to widen social networking, generate positive social capital across society and more importantly, hold the prospect of enhancing social integration between ethnicities.