Research may be viewed as rigorous inquiry to advance knowledge and improve practices. An international commission has argued that strengthening research capacity is one of the most powerful, cost-effective, and sustainable means of advancing health and development. However, the global effort to promote research in developing countries has been mostly policy driven, and largely at the initiative of donor agencies based in developed countries. This policy approach, although essential, both contrasts with and is complementary to that of research managers, who must build capacity "from the ground up" in a variety of health service settings within countries and with differing mandates, resources, and constraints. In health organizations the concept of research is broad, and practices vary widely. However, building research capacity is not altogether different from building other kinds of organizational capacity, and it involves two major dimensions: strategic and operational. In organizations in the health field, if reference to research is not in the mission statement, then developing a relevant research capacity is made vastly more difficult. Research capacities that take years to develop can be easily damaged through inadequate support, poor management, or other negative influences associated with both internal and external environments. This paper draws from key international research policy documents and observations on the behavior of research and donor agencies in relation to developing countries. It examines capacity-building primarily as a challenge for research managers, realities underlying operational effectiveness and efficiency, approaches to resource mobilization, and the need for marketing the research enterprise. Selected examples from South Asia and Latin America and the Caribbean are presented.