Information Systems (IS) are very important for the provision of e-services by government, to Ministries, Departments and Agencies (MDSs) and its citizens. There are several ways in which the public sector acquires its information systems and these include in-house development, buying off-the-shelf and outsourcing development among others. Outsourcing has now become a common practice across the globe and most of information systems in the public sector are being outsourced. IS outsourcing literature mainly focuses on the private sector in developed countries, leaving a gap on IS outsourcing in the public sector. Therefore, this gap compelled the researcher to conduct this study to investigate challenges and opportunities of IS outsourcing in the public sector in Malawi; specifically investigating factors that lead to IS outsourcing, assessing how it is done, and determining strategies required for resolving its challenges. Qualitative research method was used for data collection where thirty one participants (31) from various MDAs were interviewed. Purposive sampling was used to select participants who would provide relevant data either because they were previously involved in IS outsourcing or are using the outsourced IS. Case study approach was employed with ten outsourced information systems from eight ministries/departments forming part of the study. The findings of the study show that most IS in the government are outsourced and this trend is likely to continue into the foreseeable future. The study further revealed that there are IS outsourcing opportunities and among them are: access to latest technology, skills and knowledge transfer and Service Provider’s capacity among others. It also revealed that there are challenges like inability to understand requirements, inadequate training, hidden costs and hidden information that need to be resolved.