Mutuku, Morrisson KaundaMuathe, Stephen M. A.James, Rosemary2019-10-032019-10-032019European Journal of Business and Management Vol.11, No.17, 20192222-19052222-2839http://ir-library.ku.ac.ke/handle/123456789/19725Research ArticleCommercial banks operate in a very competitive environment. As such, e-commerce capability of e-commerce has become a crucial tool for provision of competitive advantage and improved performance. However, the mediating effect of competitive advantage on the relationship between e-commerce capability and performance is still a key question. The study empirically analyzed the mediating effect of competitive advantage on the relationship between e-commerce capability and performance of commercial banks in Kenya. Competitive advantage was measured using customer satisfaction index. E-commerce capability was measured using four dimensions of information capability, transaction capability, customization capability and back-end integration capability while performance was measured using Return on Assets. The study was anchored on the Resource- Based View Theory. The study used explanatory research design. A census of 43 commercial banks was taken; data for performance was extracted for the financial year 2016/2017. Data for e-commerce capability was collected from commercial banks websites. Data analysis was done using descriptive and inferential statistics. The study findings revealed that competitive partially mediates the relationship between e-commerce capability and performance of commercial banks in Kenya. recommends that managers of commercial banks should consider delivering superior value to their customers though implementation of e-commerce capability.enArticle