Information Technology Outsourcing (ITO)has generated considerable research interest since the historicEastman Kodak deals of 1989. In this paper, amodel has been developed for making the ITO decisionbased on the Analytic Hierarchy Process (AHP). Two hierarchieshave been developed - one for making a choiceof activities to outsource and another to choose the appropriateoutsourcing methodology. The model has beentested by applying it to an outsourcing decision made bya leading locomotive company of India. Keywords Outsourcingactivity; Outsourcing methodology; AHP technique.