OBJECTIVES: Locally led health research in low and middle income countries (LMICs) is critical for overcoming global health challenges. Yet, despite over 25 years of international efforts, health research capacity in LMICs remains insufficient and development attempts continue to be fragmented. The aim of this systematic review is to identify and critically examine the main approaches and trends in health research capacity development and consolidate key thinking to identify a more coherent approach. METHODS: This review includes academic and grey literature published between January 2000 and July 2013. Using a predetermined search strategy, we systematically searched PubMed, hand-searched Google Scholar and checked reference lists. This process yielded 1668 papers. 240 papers were selected based on a priori criteria. A modified version of meta-narrative synthesis was used to analyse the papers. RESULTS: 3 key narratives were identified: the effect of power relations on capacity development; demand for stronger links between research, policy and practice and the importance of a systems approach. Capacity development was delivered through 4 main modalities: vertical research projects, centres of excellence, North-South partnerships and networks; all were controversial, and each had their strengths and weaknesses. A plurality of development strategies was employed to address specific barriers to health research. However, lack of empirical research and monitoring and evaluation meant that their effectiveness was unclear and learning was weak. CONCLUSIONS: There has been steady progress in LMIC health research capacity, but major barriers to research persist and more empirical evidence on development strategies is required. Despite an evolution in development thinking, international actors continue to use outdated development models that are recognised as ineffective. To realise newer development thinking, research capacity outcomes need to be equally valued as research outputs. While some development actors are now adopting this dedicated capacity development approach, they are in the minority.