This study examined the status, challenges, and opportunities for egovernment transformation in Tanzania. The study begins by examining the status, challenges, and opportunities of e-government as a potential driver of government transformation. Expert survey results and a SWOT analysis were applied to analyzing the current challenges critical to the initiation, development, and implementation of e-government in Tanzania. Data were collected from Tanzania from May to June 2014 using a focus group discussion and field observations as well as a documentary review. The three factors of technology, social e-transformation, and institutional docility were discussed to see whether they positively or negatively affect e-government transformation. The study found that (1) a reluctance towards transparency and accountability, (2) an avalanche of technology, and (3) an illusion of innovation and technological misfortune led to a stagnant e-government process, yielding more corruption and conflict of competing interests in the whole transformation process. These problems substantially affect technology and social e-transformation whereas institutions become more docile. From the e-government Master Plan to technology policy instruments, including IT/ICT infrastructure policy, information and data privacy and confidentiality, and cybercrimes policy were amongst the most critical challenges. An implication for the successful institutionalization of e-government transformation is that leadership should strategically embrace developing sustainability, planning, coordination, optimization, and integration of IT/ICT infrastructure projects for the betterment of e-government transformation.