The development of e-government has attracted considerable scholarly interest in recent years, but relatively little has been written about the capacity to develop and provide new e-government services. This chapter seeks to add to our knowledge in this area by assessing the ability of city managers in the United States, to effectively champion e-government development. We present an analysis of scores on the technology practice of the ICMA Applied Knowledge Assessment demonstrating that city managers possess relevant knowledge, but we also find some interesting generational variations in technology literacy and knowledge about managing technology. We also examine the ability of city managers to provide leadership for e-government development and identify some important challenges. We conclude that there are limits to capacity that could delay e-government developments in the future and offer some recommendations on how to limit their impact.