The research paradigm now known as the Virtual Observatory (VO) was identified in the 2000 decadal report as a high priority for supporting future astronomical research. With data volumes from new instruments growing exponentially into the Petabyte range and beyond, the old ways of doing analysis where data is downloaded and processed locally on the desktop will no longer be sufficient to fully realize the scientific potential of future instruments and surveys. A new approach is required where analysis is distributed, often still driven from the desktop but with much of the computation taking place remotely, close to the data, with built-in capabilities for scaling up. This trend is not unique to astronomy but is affecting all of the data-intensive sciences, including other fields such as biology, oceanography and high energy physics. It was recognized early on that this problem was too large for any one project or institution to address; in any event a broader solution was needed since modern astronomical research is increasingly multi-wavelength in nature. The US National Virtual Observatory (NVO) project was founded in late 2001 and began work on VO in 2002. The VO effort quickly grew into an international effort, and saw the formation of the International Virtual Observatory Alliance (IVOA) in 2003, charged with developing international standards for the virtual observatory. Today the VO is in transition from a successful research and IT development phase, which has defined the technical framework for the virtual observatory and seen this implemented widely throughout the community, to an operational phase where useful end-user capabilities must be delivered to the general astronomical research community. In this talk we will review what has been accomplished in the initial research phase of the VO, and what is planned for the future, including: o What is the VO? o Current VO Capabilities and Applications o Inside the VO (data discovery, access, analysis, publishing) o Current Status and Future Developments Coverage of future developments will include a brief look at plans for the US Virtual Astronomical Observatory (US VAO), and for VO-related developments within the NRAO.