<p>Despite their widespread adoption as the preferred mode of organizing within the international construction industry, the existing theoretical understanding of project-based organizations (PBOs) is still disparate and scattered across many different disciplines. The current paper provides a detailed theoretical analysis of the PBO phenomenon in the specific domain of construction, covering its main features, various structural configurations, and the inter-organizational relationships that influence project performance. Based on the organization, project management, and construction management theories, the paper explores the inherent features of temporary organizations, the matrix and projectized structures used in forming PBOs, the role of trust and relational capital in governing organizational coalitions, and the ongoing problems of transferring organizational knowledge and learning. In conclusion, it is argued that a permanent organization theory is inadequate in understanding construction PBOs and a theoretically consistent approach that specifically targets temporary multi-organizational production must be formulated in order to achieve empirical success. Potential areas for future research are discussed.</p>