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Small island developing states (SIDS) have much to gain from the use of Health Information Technology (HIT) and telehealth to improve care, improve population health, increase access to care, and lessen costs. At the same time, planning, implementing, and operationalizing HIT is costly and requires significant technical, human, financial and planning resource infrastructure to support implementation and operations. This paper provides a broad overview of how HIT and telehealth has evolved in the U.S. Affiliated Pacific Islands (USAPI) SIDS, the progress that has been achieved, the role of political affiliations and international assistance, and the many challenges that remain. The paper highlights the differences in treatment between the territories and the nations affiliated with the United States through the Compacts of Free Association (COFA), and the important roles of other donor countries, regional, and international organizations. The paper also raises questions of how advances in HIT and telehealth can be further achieved and sustained in the USAPIs. Finally, the paper identifies the need for the building of knowledge and skills to develop careful plans so pitfalls of silos, proprietary systems, and inadequate technical support can be lessened or avoided in the grand challenge of adoption and maturing of HIT and telehealth.