Organizational agility, defined as the ability of organizations to sense and respond to market opportunities and threats with speed and surprise, is quickly becoming the hallmark of companies that consistently emerge as leaders in hypercompetitive environments. While explaining the role of IT, this paper argues that in order to be agile firms must be electronically integrated internally (with organizational units) and externally (with partners, suppliers and customers). Such integration enables firms to capitalize on knowledge and competencies of their partners and allows them to be agile in sensing and responding to opportunities and threats. This paper uses the organizational integration model presented by Barki and Pinsonneault (2005) and focuses primarily on the role of IS in organizational integration. While exploring this relationship and the mediating effects of knowledge integration and core business process competencies, this paper contributes a complementary view of organizational agility.