The Sharing Health Care Initiative (SHCI) demonstration project, which aimed to improve management of chronic diseases, was implemented in four small remote communities in the Katherine region which are serviced by the Katherine West Health Board, a remote Aboriginal-community-controlled health organisation in the Northern Territory. We reviewed the project proposal, final report, evaluation reports and transitional funding proposal, and supplemented these with in-depth interviews with key individuals. We determined factors critical to the sustainability of the SHCI project in relation to context, community engagement, systems flexibility and adaptability, the availability and effect of information systems, and the human nature of health care and policy. The project had a significant impact on community awareness of chronic disease and an improvement in clinic processes. We found that a number of interrelated factors promoted sustainability, including: An implementation strategy sufficiently flexible to take account of local conditions; A high level of community engagement; Appropriate timeframes, timing and congruence between national policy and local readiness to implement a chronic disease project; Effective communication between participating organisations; Project champions (key individuals) in participating organisations; Effective use of monitoring and evaluation data; and Adequate and ongoing funding. The absence of a number of these factors, such as poor communication, inhibited sustainability. Other factors could both promote and inhibit. For example, the impact of key individuals was important, but could be idiosyncratic and have negative effects.