This research investigates the relationship between virtual employees' degree of physical isolation and their perceived respect in the organization. Respect is an identity-based status perception that reflects the extent to which one is included and valued as a member of the organization. We hypothesize that the degree of physical isolation is negatively associated with virtual employees' perceived respect and that this relationship explains the lower organizational identification among more physically isolated virtual employees. In two field studies using survey methods, we find that perceived respect is negatively associated with the degree of physical isolation, and respect mediates the relationship between physical isolation and organizational identification. These effects hold for shorter- and longer-tenured employees alike. Our research contributes to the virtual work literature by drawing attention to physical isolation and the important but neglected role of status perceptions in shaping virtual employees' organizational identification. We also contribute to the literature on perceived respect by demonstrating how respect is affected by the physical context of work.