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Introduction: The System Level Framework (SLMF) is a policy introduced by New Zealand’s Ministry of Health in 2016 with the aim of improving health outcomes by stimulating inter-organisational integration at the local level. We sought to understand which conditions that vary at the local level are most important in shaping successful implementation of this novel and internationally significant policy initiative relevant to integrated care. Strategy and Methods: We conducted 50 interviews with managers and clinicians who were directly involved in SLM implementation during 2018. Interview data was supplemented with the SLM Improvement Plans of all districts over the first three years of implementation. We used Qualitative Comparative Analysis (QCA) to identify the combinations and configurations of necessary and sufficient conditions of successful implementation. Results: We found that the strength of formal and informal organisational relationships at the local level were critical conditions for implementation success, and that while fidelity to the policy programme was necessary, it was not sufficient. Broader contextual features such as population size and complexity of the organisational environment were less important. The SLMF was able to deepen and widen inter-organisational collaboration where it already existed but could not mitigate the legacies of weaker relationships. Discussion: The two dimensions of implementation success, ‘Maturity of SLM Improvement Plan Processes’ and ‘Data Sophistication and Use’ were closely related. Broadly, our findings support the contention that integrated approaches to health system improvement at the local level require collaborative, trust-based approaches with an emphasis on iterative learning, including the willingness to share data between organisations. Conclusion: In the context of integrated care, our findings support the need to focus on establishing the conditions that build collaborative governance in addition to strengthening it when it already exists.