The healthcare industry in Kenya is going through many challenges including low funding, shortage of staff, technological innovation huddles and changing customer expectations which puts pressure on public hospitals to attaining competitive advantage. The purpose of this study was to examine the influence of customer relations capabilities on competitive advantage of Level 5 public hospitals in Kenya. The study was anchored on dynamic capabilities theory. Positivism philosophy applied, where a descriptive correlational research design was adopted. A structured questionnaire was applied to gather quantitative data. The study focused on 33 Level 5 public hospitals in Kenya and the study population comprised 495 Chief Executive Officers (CEOs, departmental heads and administrative heads of all the Level 5 public hospitals. Stratified random sampling was used to pick a sample of 222 respondents. The study’s data analyses involved descriptive statistics (frequencies, means and standard deviations) and inferential analysis (simple linear regression analysis). The findings revealed that customer relations capabilities had a statistically significant and positive effect on the competitive advantage of Level 5 public hospitals in Kenya (β = 0.629, p < 0.05). The study concluded that customer relations capabilities are instrumental towards attainment of competitive advantage of the Level 5 public hospitals in Kenya. Based on the conclusion of the study, it is recommended to the top management of level 5 public hospitals to adopt systems and processes in their hospitals that gathers information to investigate customer needs.