Firms believe their investments (of time and money) in IT increase their IT capabilities that, in turn, improve their competitive position in the marketplace. But to invest, firms need to understand how IT capability impacts business value. This dissertation, based on the resource-based view of the firm, explores the relationship between IT capability and the business value of IT using the DeLone and McLean Information Systems Success (ISS) framework to define IT capability and four dimensions of IT (strategic, transactional, informational, and transformational) to define the business value of IT. A partial least squares regression analysis demonstrated a high correlation between IT Capability and the Business Value of IT; however, analysis showed no indication of a relationship between Service Quality and IT Capability. The later finding is important because it challenges a key aspect of the widely accepted, highly cited DeLone and McLean ISS framework.