Developing countries have realised that if they fail to provide an adequate infrastructure and knowledge base, then they risk falling behind both economically and socially in the emerging networked world. In this context, e-readiness assessment tools can help in the formulation of national action plans for both developed and developing countries. The purpose of this study is to develop a comprehensive tool to assess e-readiness in developing countries, in particular in the Arab ones, to improve e-readiness processes and to benefit from the use of information and communications technology. Specifically, this research: compares the current e-readiness assessment tools, identifies the crucial factors and steps needed for generating a comprehensive tool to measure e-readiness in developing countries and suggests how to improve e-readiness assessment in these countries with special reference to Saudi Arabia where the research was carried out. An important part of this study has been the design and development of a new ereadiness tool to assess e-readiness in the developing countries. A total of nine ereadiness factors were studied to investigate e-readiness in order to develop the new tool: ICT Infrastructure, Access to Skilled Workforce, Knowledgeable People, Culture, E-government and Policy, E-economy and E-commerce, Competitiveness, Cost of Living and E-health. These factors consist of 132 variables. Although the selection of the factors and their variables was based on literature and consultations with professionals in the ICT field, the tool was modified by using statistical tests on 87 of the variables. To test the new tool, a total of 200 questionnaires were distributed to Saudi organisations across the Kingdom of Saudi Arabia but only 87 organisations (48 public and 39 private sector organisations) responded. Then, 30 interviews with ICT managers were carried out to explore in more detail ICT issues such as the level of e-readiness in the whole country, e-commerce, ICT strategy, the role of the government, ICT managers as decisions-makers, e-health and the barriers that prevent the development of ICT infrastructure over the whole country. E-readiness indices based on the mean of respondents' answers were calculated for the nine e-readiness factors using five scales measure in which one equalled poor and five equalled excellent. In general, the tool found that five out of the eight e-readiness factors i.e. e-governance and policy, knowledgeable people, ICT infrastructure, eeconomy and e-commerce, and access to skilled workforce had indices values which varied approximately between the average i.e. 3 and less than 3.45 for the public sector, private sector and for the whole country. Factors such as e-health. cost of living, and culture have indices values below the average and vary approximately between 1.810 and 2.800. In order to evaluate and test the new e-readiness tool. the researcher used it to assess an e-readiness score for the Saudi private and public sectors and for the whole country. This found their indices were 2.815, 3.038 and 2.917 respectively. The test result was also compared with existing e-readiness tools which had been used on other developing countries. It was seen that the new e-readiness tool was more accurate and more reliable as it was based on newly collected data from the country surveyed rather than on statistical information from international organisations.