Description: Prompted by concern at government level in England that primary to secondary school transfer can result in learning regression (OFSTED, 1998; 2002), this paper draws on case study research into the change and continuity factors drawn from the perspectives of children and teachers during school transfer and transition in England (where children transfer from primary to secondary school and Denmark (where the majority remain in the same Folkeskole until they are 15). Using the concept of an 'effective learning environment' derived from a combination of the identified change and continuity factors and from learning theory, the paper explores the space between leaving one learning environment and joining another, the management implications and the effect of the moves on learning progression. It considers the usefulness of Engestrom's (2001) activity theory as a tool to investigate whether the 'third space' can meet the criteria for an 'effective learning environment' and if so, how. The paper includes a review of the literature (available in English) on the roots of the two different education structures. It indicates where further research into the history, culture and pedagogy of the Danish school system could inform the discussion on the impact of transfers and transitions on learning. Methodology: The field research constituted a collective case study (Stake, 1998) reflective of four cases, each with two primary and three secondary schools, during transfer in England, and a smaller single case study of school transfer and transition with three Danish schools. The data for the research were collected using interviews and questionnaires with 118 children and 227 teachers before and after transition and transfer. The data from the interviews and questionnaires were analysed using an adaptive theory approach (Layder, 1998) developed from grounded theory (Glaser and Strauss, 1967) and the emerging themes were explored with Engestrom's (2001) matrix of four questions and five central principles of activity theory. Conclusions: It was found that whilst schools had difficulties managing cross-phase teacher collaboration and building on prior learning, in England government policy had exacerbated the difficulties, particularly the transfer and use of the assessment and curriculum information. Within Denmark, a comparison of transfer and continuity found that regression in learning occurred in the schools, which were using the primary/secondary structure. The study indicated that the transfer learning environment created by the primary/secondary divide may not be conducive to learning progression. A continuous structure might provide a solution but would remove the vehicle for selection and open enrolment - important aspects of English government policy. Engestrom's matrix was found to be a useful tool in identifying the contradictions within the activity systems which emerge as children transfer from class to class and school to school.