In this paper, we propose a distributed key management framework based on group signature to provision privacy in vehicular ad hoc networks (VANETs). Distributed key management is expected to facilitate the revocation of malicious vehicles, maintenance of the system, and heterogeneous security policies, compared with the centralized key management assumed by the existing group signature schemes. In our framework, each road side unit (RSU) acts as the key distributor for the group, where a new issue incurred is that the semi-trust RSUs may be compromised. Thus, we develop security protocols for the scheme which are able to detect compromised RSUs and their colluding malicious vehicles. Moreover, we address the issue of large computation overhead due to the group signature implementation. A practical cooperative message authentication protocol is thus proposed to alleviate the verification burden, where each vehicle just needs to verify a small amount of messages. Details of possible attacks and the corresponding solutions are discussed. We further develop a medium access control (MAC) layer analytical model and carry out NS2 simulations to examine the key distribution delay and missed detection ratio of malicious messages, with the proposed key management framework being implemented over 802.11 based VANETs.