Action learning is a promising approach for building mental health promotion (MHP) capacity. The aim of this study is to explore how action learning processes can strengthen MHP capacity within and across organizations in a community setting. We applied an embedded case study design and a realist evaluation framework to explore key combinations of mechanisms and contextual factors that generated the emergent MHP capacity outcomes of an action learning program, i.e. context-mechanism-outcome-configurations (CMO-configurations). Data consisted of 18 semi-structured face-to-face interviews, 10 telephone interviews, two group interviews, observations, and documents. Interviewees (n = 21) were participants and management employees. Our analytical provision of CMO-configurations provides insights into how contextual factors, such as participant motivation, organizational support, and existing task descriptions, in combination with certain program mechanisms, such as legitimization of specific agendas, learning-by-doing, and collaborations across organizational boundaries, explain the identified outcomes. Outcomes ranged across implementation of MHP initiatives, personal development among participants, and relational and collaborative development. Taken together, our results strengthen the notion that mechanisms of action learning hold the potential to build MHP capacity on an individual, organizational, and community level. This study, also, illustrates that realist evaluation offers a relevant methodology for investigating the underlying workings of capacity building programs.