A lack of management capacity has been identified as the key stumbling block to the transformation and reconceptualization of the public sector in South Africa into a more effective, efficient, and responsive system of health delivery. As part of the overall management development process, this research aimed to identify the skills important for public sector health management and to evaluate managers' self-assessed proficiency in each of these skills. A cross-sectional survey using a self-administered questionnaire was conducted among hospital managers in the South African public health sector. Respondents were asked to rate the level of importance that each proposed competency had in their job and to indicate their proficiency in each skill. Self-assessment of levels of competency showed that managers felt most competent in strategic planning, people management, and self-management, and relatively less competent in the task-related skills and their ability to deliver healthcare. People management, self-management, and task-related skills were rated as being most important, followed by strategic management and health delivery skills, respectively. The largest differences between mean importance rating and mean skill rating were for people management skills, task-related and self-management skills. These findings reflect the reality of the local health service environment and the needs of health managers and will be useful in the conceptualization, design, and delivery of health management programs aimed at enhancing current and future management and leadership capacity in the public health sector in South Africa. © 2008 Lippincott Williams and Wilkins, Inc.