This study aims to investigate the major causes of conflict between clients and vendors in the outsourced IS development. A research model is established based on the prior research of IS outsourcing, system development and conflict. An empirical study was executed using 214 survey questionnaire of project teams composed of client and vendor with PASW 18.0. Research results using multiple regressions show that contract specificity, requirements certainty, objective alignment and client knowledge have negative effects on conflict. This research results will provide various implications for outsourcing project success.