The information systems (IS) literature elaborates on how firms develop organizational agility based on organizational capabilities to sense and respond to rapidly changing environments. However, the underlying mechanism of how companies and their chief executive officers (CEOs) understand and implement digital technologies to foster organizational agility is lacking. The technological frame concept provides an impetus to explain the process by which CEOs’ sensemaking of digital technologies influences organizational agility. Our paper draws on the individual-level perspective of the technological frame concept and proposes a mediating role of digital business capabilities, composed of digital strategy, digital integration, and digital control. Our quantitative research design is based on findings derived from 386 German CEOs and confirms that CEOs’ technological frame influences organizational agility through digital business capabilities. Thereby, we expand the concept of the technological frame on the individual level and contribute to the IS literature by revealing the mechanism of how CEOs’ sensemaking influences organizational agility.