The current study investigates the impact of dynamic capabilities on competitive advantage of ICT industry in Sri Lanka considering the three categories of dynamic capabilities namely adaptive capabilities, absorptive capabilities and innovative capabilities. Convenient sampling was used to draw the sample and survey data were collected from 167 ICT firms. Structural Equation Modeling (SEM) was used to analyze the relationship between variables. Finding of the study shows that dynamic capabilities have significantly positive impact on competitive advantage. In addition, the empirical evidence verifies that, innovative capabilities are more positively related to competitive advantage than other two types of dynamic capabilities while adaptive and absorptive capabilities also show the positive impact on competitive advantage.