In recent years the concept of capacity-building or capacity development has evolved to help policymakers frame crucial questions about how sustainability can be achieved. However, like sustainable development, capacity-building proves difficult to define, as it encompasses human, technological, educational, organisational, scientific, cultural, financial, and institutional aspects. This article suggests that capacity-building is an approach to sustainable development, its main goal being to enhance the capabilities of people and institutions to improve their skills and abilities to solve problems, define their needs, and strengthen their prospects for achieving sustainable livelihoods. Capacity-building is now a key objective for the Arctic Council — indeed, the Council sees it as a necessary element for both the achievement of sustainable development and for co-operation at circumpolar and wider international levels. The Arctic Council has charged its Sustainable Development Working Group to draft a capacity-building implementation strategy. The overall aim of a capacity-building implementation strategy will be to enhance the Arctic Council's own effectiveness in managing its own structures and developing programmes and activities, and also to shape a capacitybuilding role for the Council in international affairs. This article offers some perspectives on the kinds of critical issues an Arctic Council capacity-building strategy should be concerned with, such as skills, knowledge, well-being, gender equality, and the barriers to capacity-building for sustainable livelihoods. A test of the effectiveness of such a strategy will be how far it strengthens the capacity of the peoples of the Arctic to achieve sustainable livelihoods and how the Arctic Council can build its own capacity to be an enabling environment for Arctic voices to be heard in circumpolar and international contexts.