A virtual conferencing system is described for implementing breakout groups. For example, one embodiment of the virtual conferencing system comprises: a virtual conferencing service to establish audio and/or video connections between the plurality of clients during a virtual conference, each of the clients operated by at least one participant in the virtual conference, the virtual conferencing service further including a state synchronization service communicatively coupled to state management logic on each client to ensure that the current state of the virtual conference is consistent on each client; breakout group selection logic to subdivide the participants in the virtual conference into a plurality of breakout groups, the breakout group selection logic to select participants for each breakout group based on participant data related to each participant and input from a moderator; and breakout group generation logic to generate the selected breakout groups by modifying the current state on each client, thereby causing video and audio streams of the participants to be seen and heard, respectively, only between participants in the same breakout group and by providing breakout group materials and making the breakout group materials available to only participants within the same breakout group.