Entering new technology domains and developing capabilities in newly entered fields is essential for the long-term performance of firms in technology-intensive industries. In this paper, we argue that firms' choices to enter new technology domains, as well as subsequent technological performance in these fields, are not only governed by internal, firm-specific factors but also by the technological and competitive environment that firms are facing. In a longitudinal study of entry and performance in a broad range of technology domains by 176 leading technology intensive firms in five industries, we find that entry decisions are influenced by variation in the opportunities for technology development between fields. However, firms are positioned heterogeneously to benefit from such technological opportunities, and successful entry depends on the presence of related internal technological capabilities. Entry takes place less frequently, and proves to be less effective, in fields where competitors have raised entry barriers through concentrated technology ownership.