With 3D digital events exciting e-gamers, luxury brands experimenting with NFTs, and the medical industry investigating virtual and augmented reality technologies for remote surgeries, the metaverse is currently a vibrant space in which firms dabble in identifying application areas for innovation and growth. In this project, we investigate how firms conduct nascent market work in metaverse markets. Nascent market work comprises the activities firms carry out to legitimize a new market and to create and capture value in it. We approach this topic in four steps: First, we carry out a longitudinal field study to propose how firm strategies, stakeholders’ legitimacy perceptions, and activities of companies co-evolve while forming opportunities and challenges for firm innovation performance in the metaverse. This study involves qualitative interviews with firms and relevant stakeholders (consumers, governmental institutions, NGOs, investors, media) to study the ways in which they engage in sensemaking and sensegiving to others. Second, we conduct a quantitative content analysis of archival data (press releases, media coverage, social media posts), to investigate which nascent market work receives more versus less public approval and why. Third we build on Step 1 & 2, to develop and validate multi-item scales that allows to capture firm’s nascent market work in quantitative studies. Fourth, and building on Steps 1-3, we carry out a quantitative study in three consecutive phases to capture how firm activities in the metaverse influence their performance. We expect that the results contribute to understanding the relevance of different activities and interactions between firms and their stakeholders in building a nascent market.