BACKGROUND: To operate effectively the public health system requires infrastructure and the capacity to act. Public health's ability to attract funding for infrastructure and capacity development would be enhanced if it was able to demonstrate what level of capacity was required to ensure a high performing system. Australia's public health activities are undertaken within a complex organizational framework that involves three levels of government and a diverse range of other organizations. The question of appropriate levels of infrastructure and capacity is critical at each level. Comparatively little is known about infrastructure and capacity at the local level. METHODS: In-depth interviews were conducted with senior managers in two Australian states with different frameworks for health administration. They were asked to reflect on the critical components of infrastructure and capacity required at the local level. The interviews were analyzed to identify the major themes. Workshops with public health experts explored this data further. The information generated was used to develop a tool, designed to be used by groups of organizations within discrete geographical locations to assess local public health capacity. RESULTS: Local actors in these two different systems pointed to similar areas for inclusion for the development of an instrument to map public health capacity at the local level. The tool asks respondents to consider resources, programs and the cultural environment within their organization. It also asks about the policy environment - recognizing that the broader environment within which organizations operate impacts on their capacity to act. Pilot testing of the tool pointed to some of the challenges involved in such an exercise, particularly if the tool were to be adopted as policy. CONCLUSION: This research indicates that it is possible to develop a tool for the systematic assessment of public health capacity at the local level. Piloting the tool revealed some concerns amongst participants, particularly about how the tool would be used. However there was also recognition that the areas covered by the tool were those considered relevant.