How can fragile states and the international community strengthen capacity and find a path from fragility to socio-economic progress? This article offers some answers to this question. The discussion opens with brief overviews of capacity and capacity development (CD), and then turns to capacity targets in fragile states. Almost any CD choice involves trade-offs and dilemmas. The article explores the following: state versus non-state service provision, services now versus institutional strengthening, immediate security versus long-term stability, technical versus political factors and external actors and local capacity. A model of CD intervention is presented. The model identifies three dimensions that can be used to characterise interventions to build capacity: the amount of time required, the degree of difficulty and complexity and the scope and depth of the change involved. The implications of the model are identified. The article concludes with some emerging guidance for CD. Copyright © 2009 John Wiley & Sons, Ltd.