Academic staff performance in higher education institutions globally, is seen as a fundamental driver of economic growth achieved through the dispersion of knowledge towards manpower development. The complexity of academic staff performance in Kenyan universities has drawn criticism. Relational contract is thought to have an impact on employee attitudes and performance. The objective of the study envisaged examining how organizational capabilities mediated the relationship between academic staff performance and relational contract at selected Kenyan public universities. This study was conducted using descriptive and explanatory research design. This study targeted six public universities whose student populations were above 15,000 and a minimum of 4 similar schools across the universities. The target population was 6 selected public universities with a population size of 6,271 academic staff. The sample size was 362 academic staff of the selected schools in the selected public universities. Primary data was collected using a questionnaire, bearing both structured and semi-structured questions. The findings established that organisational capabilities partially mediated association between academic staff performance and relational contract in selected Kenyan public universities. The study concluded that institutional capabilities such as organizational leadership, organizational communication and organizational culture are necessary ingredients that universities need to implement sustainable relational contract which can result in not only high performance of staff but also sustainable performance. The study recommends that management of public universities in their pursuit of increased staff performance should invest in modern, working and reliable organisational capabilities which will create a conducive environment for effective management of relational contract between the universities' management and staff.