This dissertation examines how customers' attribution for service failures and expected recovery in online service encounters are influenced by whether the recovery efforts are satisfying or dissatisfying to the customers; the relationship between satisfaction and other behavioral outcomes such as intention to remain and word-of mouth is examined. Many customers are using the Internet to purchase products and services, pay bills online, and make hotel and airline reservations. The Internet service recovery encounter warrants special attention because of its inherent ramifications such as the ease of attributing failure to the service provider after a service failure, the lack of interpersonal relationship, and the ease of leaving one service provider for another. The purpose of this study is to explore some of the importance of Internet service recovery mechanisms relative to customer's attribution for failure, expected service recovery, satisfaction, and intent to remain. This study further seek to explore how these mechanisms can be employed by the service providers to improve customer satisfaction, minimize negative word-of-mouth, and improve the firm's profitability. Many studies have examined customer satisfaction/dissatisfaction in traditional retailing, and the antecedents of the unsatisfactory behavior however, the same cannot be said of the Internet service encounters despite ecommerce revolution and its impacts on retailing and service encounters. A conceptual framework of recovery expectation and satisfaction in Internet based service encounters is presented, and a scenario-based experimental design is developed to measure the constructs. A web-based data collection was employed and the collected data were analyzed using correlation and regression analysis to provide answers to the research questions. The results of the analyzed data were discussed and presented. The findings overwhelmingly support all the hypotheses and contribute to the field of marketing by exploring some issues that might be unique to the online shopping experience and add more to the body of literature on online service failure and recovery management. The managerial implications, limitations, and future research directions are also presented.