Strong national health research systems are needed to improve health systems and attain better health. For developing countries to indigenize health research systems, it is essential to build research capacity. We review the positive features and weaknesses of various approaches to capacity building, emphasizing that complementary approaches to human resource development work best in the context of a systems and long-term perspective. As a key element of capacity building, countries must also address issues related to the enabling environment, in particular: leadership, career structure, critical mass, infrastructure, information access and interfaces between research producers and users. The success of efforts to build capacity in developing countries will ultimately depend on political will and credibility, adequate financing, and a responsive capacity-building plan that is based on a thorough situational analysis of the resources needed for health research and the inequities and gaps in health care. Greater national and international investment in capacity building in developing countries has the greatest potential for securing dynamic and agile knowledge systems that can deliver better health and equity, now and in the future.