Transactional distance is an important pedagogical theory in distance education that calls for more empirical support. The purpose of this study was to verify the theory by operationalizing and examining the relationship of (1) dialogue, structure and learner autonomy to transactional distance, and (2) environmental factors and learner demographic factors to transactional distance in web‐based distance courses. More than 200 online undergraduate and graduate students in a Midwest university in the USA were surveyed. The findings indicate that high levels of structure and dialogue are not necessarily incompatible while supporting the inverse relationship of structure, dialogue and learner autonomy to transactional distance. Environmental factors and learner characteristics impacting transactional distance are identified, and practical implications of the findings for online course design are discussed.