The extent to which information technology (IT) is used strategically is measured in a sample of 147 small Slovene firms. Slovenia is interesting from a small business perspective, because from 1990, when the transformation of its economy started, the number of small business has increased almost 6 times (from almost 6.500 to nearly 35.000 in 1998). The results have shown IT industry leadership and also IT’s role in a firm to be the strongest predictors in the strategic usage of IT. It was also found that IT is particularly well utilized in firms emphasizing innovation and, to a lesser degree, an efficiency strategy. Firms pursuing a low-cost strategy were the least likely to utilize IT strategically.