This paper aims to explore the process of conflicts in agile software projects. The purpose was to investigate the causes and consequences of these conflicts. For this purpose, we conducted a qualitative study involving agile software projects in Norway. Grounded theory was used to analyze the data and the interview findings are presented using Glaserfs Six C model (context, condition, causes, consequences, contingencies, and covariance). The research findings suggest that there are several causes of conflicts. These include: the role of the product owner, an inexperienced project manager, the customer’s lack of knowledge about methodology organizational hierarchy in public companies, contracting, personal egos, financial issues, not getting the right team. Consequences of conflicts include: decreased productivity, wastage of time and resources, diverted attention from project objectives loss of motivation, poor decision making, loss of communication. Based on interview data, different conflict strategies are suggested and these include appropriately skilled project manager, communication and negotiation, defining clear roles, stakeholder analysis, managing stakeholders expectations, discussion, finding the root cause of conflict. Project managers are using these strategies to avoid or resolve conflicts. The competencies required to handle these kind of conflicts are also discussed in the paper, while the implications of theory and practice of conflict management theory are also presented.