Capacity building is often described as fundamental to the success of health alliances, yet there are few evaluations that provide alliances with clear guidance on the challenges related to capacity building. This article attempts to identify potential challenges of capacity building in multistakeholder health alliances. The study uses a multiple case study design to identify potential challenges and trade-offs associated with capacity building in four community health alliances in the United States. Multiple challenges were found to be common across the four alliances, including specifying appropriate governance structures and decision-making frameworks, aligning stakeholder interests with the vision of the alliance, balancing short-term objectives with long-term goals, and securing resources to sustain the effort without compromising it. These challenges often involved trade-offs and choices that alliances need to prepare for if they are to approach capacity building in a planful rather than a reactive manner. © 2010 by SOPHE.