This paper identifies challenges facing the development of contextual theory in Information Systems research. The IS literature is examined to identify the variation of approaches through which IS research accounts for contextual influences in the formation of IS phenomena. The literature review reveals issues that require methodological and theoretical attention. These concern the generalization of context-specific research findings; the partiality of theory due to trade-offs of scale and detail; the development of sociomaterial perspectives of contextual influences on IS phenomena; and the challenge posed to contextual explanation from ontologies that give primacy to processes of continuous change over existing entities. From the exploration of these issues, comparative research is suggested as a promising approach to generalization; an argument is made for research framing with explicit consideration of scale of the context domain under inquiry to allow for the comparison and complementarity of research findings; alternative theoretical perspectives of context related with theories of technology and theories of action are identified; and directions toward the development of a sociomaterial perspective of context are suggested.