There are several reasons why national libraries have emerged. In some countries, they were established as symbols of national prestige and status, while others feel that a modern country should have a national library. Given the economic, social, cultural and political conditions in the developing countries that affect the establishment and maintenance of national libraries, the numerous functions of national libraries need to be assessed from these countries’ point of view. There has been a debate on whether the developing countries should have national libraries and alternatives such as university libraries were suggested. This thesis therefore aims at gaining an understanding of the establishment and development of the National Library of Uganda (NLU) as an institution. The study tries to examine the factors that influenced the establishment of the NLU; the motivations, actions and roles of the politicians and the professional library community that led to establishment of the NLU. It also investigates the present conditions shaping the NLU after its establishment and how it in turn shapes the library environment in the country. I have chosen new institutional theory by DiMaggio and Powell, to analyse the reasons and process of the institutionalization of the NLU. The conceptual framework is drawn from Scott’s institutional change perspective who argues that institutions do not emerge from a vacuum, but borrow from previous institutions and to a certain extent displace them. Oliver’s pressures of deinstitutionalization provided the lens through which to analyse the political, social and functional pressures that triggered off the process of the institutionalization of the NLU. Additionally, I chose the coercive, mimetic and normative mechanisms through which institutional isomorphic change occurs as identified by DiMaggio and Powell. These helped me to analyse the institutional process and change in the library and information sector during and after the institutionalization of the NLU. The theoretical contribution is derived from adapting this theoretical approach which has for the first time been applied in a different context in the field of Library and Information Science. It has been used on the development of a national library in a developing country, Uganda. The study is based on qualitative research consisting of in-depth face to face interviews of twenty (20) library professionals, purposefully selected as they held a leading position in the institutions involved in the establishment of the NLU or were directly affected by its establishment. I analysed documents such as the Hansard to study the political process of the enactment of the National Library Act, 2003 and other legal and primary sources. I made some observation of four (4) public libraries to find out their state after the decentralization process. The findings revealed that the factors that led to the establishment of the NLU were the decentralization of the public libraries to the districts which weakened the Public Libraries Board (PLB) and the staff were to be retrenched; Makerere University Library (MULIB) and the Deposit Library and Documentation Centre (DLDC) have weak, outdated legal deposit laws and inadequate resources to perform the national library functions efficiently and effectively. The politicians approved and enacted the National Library Act, 2003 mainly to support the decentralized public libraries. During the process of the institutionalization of the NLU, the library professionals tried to imitate other national libraries which they perceived to be successful in terms of legal deposit laws. Other ideas such MULIB and DLDC to update their legal deposit laws and collaborate with NLU; MULIB to become the second national library; the NLU to house the copyright office, ULIA to be represented on the NLU Board were rejected. The NLU apart from the collecting and publishing the National Bibliography of Uganda, is still performing most functions of the PLB such as supporting the public libraries, improving the reading culture, and participating in adult literacy campaign with the support of the development partners.