Government and public sector organizations focus on inclusiveness, transparency, security, and efectiveness. However, amid the ongoing deregulation and competition with private sectors, there are compulsions to leverage digital technologies for improving economic performance and customer satisfaction. In the above context, little is known about the role played by organizational capabilities in technology-led transformation of government. We employ SEM technique to validate our conceptual model that investigates the role of organizational capabilities on the degree of digitalization in the government organization and data for the same was collected from 196 government ofcials with relevant experience. The study found that efective digital strategy formulation increases employee digital capabilities and positively impacts digitalization in government. Vendor management capability is observed to mediate the relationship between digital strategy and digitalization in government while employee digital capability has an indirect impact through vendor management. Cultural and organizational barriers do not dampen the relationship between vendor management and digitalization in government. Our results integrate the dynamic capability framework with developments in digital transformation and technology sourcing literature