While there has been a tremendous increase in the number of firms engaging in IS offshoring efforts, many firms have been unsuccessful in realizing the intended benefits from offshoring. Most firms acknowledge the potential gains from offshoring, but lack the key capabilities for effective IS offshoring. Building on the dynamic capabilities perspective, and drawing upon extant research in strategic alliances, international business, distributed work management and virtual teams, we propose four meta-capabilities – IS systemic thinking, IS vendor management, global IS resource management and IS change management – as critical for effective IS offshoring of application development. We present preliminary findings from a 2-phased research study consisting of focus group discussions with senior IS managers, followed by in-depth case studies of IS offshoring.