Governments and development agencies in Sub-Saharan Africa are experimenting alternative approaches within the innovation systems paradigm to enhance relevance of agricultural research and extension to the poverty eradication agenda. Uganda, for example, has recently shifted from the supply driven to demand-led agricultural research and extension. This paper discusses the competence challenges associated with this shift based on experiences from a capacity building initiative for a demand-led agricultural research system and a synthesis of experiences in a demand-led extension. Consequently, key competences for the supply and demand sides are suggested. For a demand-led system to work, the supply side will have to be able to facilitate action learning and experimentation; broker information and knowledge exchange; develop and support empowerment of local organisations; think systemically; develop teams and work in teams; develop and manage partnerships and enhance enterprise development. The demand side too will have to be able to self-organise; lobby, advocate and negotiate; have visionary and accountable leadership; learn and experiment; and have entrepreneurial abilities. While in the short-term service providers have to be assisted to acquire these competences, the meta-challenge lies in a long-term strategy to integrate them in the training of professionals working in the value chain. (Contains 2 figures.)