International Journal of Business and Social Science, 2014; 5 (2)This study examined the influence of four dimensions of networking capability (NWC) namely internal communication, partner knowledge, relational skills, and coordination in SMEs performance. To attain this objective a cross sectional research design was used in which 291 SME owners / managers in three sectors of economy namely manufacturing, service and retail in Tanzania were interviewed. The results confirm positive influence of three dimensions of NWC (i.e. internal communication, partner knowledge and relational skills) in SME performance and negative influence of coordination in SME performance. These findings suggest that firms’ emphasis on relational skills set a context to identify appropriate partner with relevant resources and capabilities to complement resource needs of firms that subsequently build competitive advantage. Following debate on whether networking is beneficial or not this study ascertain that the benefits of networking are inclined on the ability of a firm to acquire and apply dimensions of NWC.