The IEEE 802.11 distributed coordination function (DCF) provides a contention-based distribution channel access mechanism for stations to share the wireless medium. However, performance of the DCF drops dramatically in terms of throughput, delay and jitter as the number of active stations becomes large. In this paper, we propose a simple and effective scheme, called distributed coordination function with virtual group (DCF/VG), for improving the performance of the IEEE 802.11 DCF mechanism. In this scheme, each station independently decides a virtual group cycle taking into account the current contention level. The virtual group cycle consists of one or more virtual groups and a virtual group includes an idle and a busy period. Each station chooses one virtual group and operates only in the chosen group of the cycle. In other words, each station decreases its backoff counter and tries to transmit its packet during the period of the chosen virtual group like in the IEEE 802.11 DCF. Performance of the proposed scheme is investigated by numerical analysis and simulation. Our results show that the proposed scheme is very effective and has high throughput and low delay and jitter behaviors under a wide range of contention levels.