Research emphasizing evolutionary and resource-based perspectives of the firm highlights the importance of core capabilities as sources of superior performance, and views capabilities in computer-based IT systems as instrumental in leading to strategic advantage. However, the asymmetrical results from such systems present a somewhat confusing picture as to the key issues that managers should be addressing. We present an approach to IS capability development that applies a combined evolutionary and resource-based perspective. We propose that IS capability is determined along three strategic dimensions and will result from effective and sustained efforts in three complementary areas that are discussed in this paper. We use three case studies to illustrate the use of the proposed IS capability framework in analyzing information systems in organizations.