In this paper, we studied the differences in testing activities between software organizations which apply agile development methods and organizations which take the traditional plan-driven approach. Our focus was on the concepts which allow the software organization to successfully apply agile development methods or plan-driven methods. We also observed the test process enhancements and hindrances, which originate in the selected development method. We interviewed 12 organizations, which were selected to represent different polar types of software production. The interviews were tape-recorded and transcribed for further analysis. The study yielded hypotheses which were derived by applying the qualitative grounded theory method. The results indicated that in practice, agile methods can improve the position of testing through the early involvement of testing activities in development, and also have a positive influence on end-product satisfaction. By applying these results, organizations can improve their processes and avoid pitfalls when transitioning to agile methods.