Across the United States the state education agency (SEA) is a "sleeping giant" with untapped potential to build instructional capacity in the nation's 110,000 public schools. The SEA is positioned to build the system-wide synergy requisite to achieve the unprecedented school-level student outcomes mandated by the No Child Left Behind (NCLB) Act. In this article, the authors illustrate this system-wide potential of the SEA by using the case of Kentucky, based on interviews with its immediate past commissioner, Gene Wilhoit. Wilhoit envisions a radical shift within the Kentucky Department of Education (KDE) from its traditional regulatory mindset to a partnership (Seeley, 1981) with districts and schools that supports school change and develops instructional capacity, which is defined as the "the collective power of the full staff to improve student achievement school wide." In making the case for the system-wide potential of the SEA for instructional capacity building, the authors first provide the methodology for their study. Then they trace the political contexts that influenced how the three chief state school officers serving under Kentucky Education Reform Act (KERA) envisioned the operations of the KDE. Third, they showcase how Wilhoit learned that school capacity building was a systemic problem. Fourth, they detail his strategies for restructuring KDE into the partnership model to implement his capacity-building vision. Last, they provide some policy implications for all state agencies facing No Child Left Behind.