This paper examines why building HR capacity is important to effective health care reform, assesses the existing evidence on HR capability in the health sector, and draws out lessons from existing practice. Developing HR capability requires investing in the training and development of both HR specialists and line managers/professionals with staff management responsibilities. It is vital that any investment in specialist HR capacity evaluates the different ways to deliver the HR function. To be effective the HR function must develop both an operational and a strategic HR capacity. (AU)