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Background: Improving health, patient and system outcomes through a practice-based research agenda requires infrastructural supports, leadership and capacity building approaches, at both the individual and organisational levels. Embedding research as normal nursing and midwifery practice requires a flexible approach that is responsive to the diverse clinical contexts within which care is delivered and the variable research skills and interest of clinicians. This paper reports the study protocol for research being undertaken in a Local Health District (LHD) in New South Wales (NSW) Australia. The study aims to evaluate existing nursing and midwifery research activity, culture, capacity and capability across the LHD. This information, in addition to input from key stakeholders will be used to develop a responsive, productive and sustainable research capacity building framework aimed at enculturating practice-based research activities within and across diverse clinical settings of the LHD. Methods: A three-phased, sequential mixed-methods action research design underpinned by Normalization Process Theory (NPT). Participants will be nursing and midwifery clinicians and managers across rural and metropolitan services. A combination of survey, focus group, individual interviews and peer supported action-learning groups will be used to gather data. Quantitative data will be analysed using descriptive statistics, correlation and regression, together with thematic analysis of qualitative data to produce an integrated report. Discussion: Understanding the current research activity and capacity of nurses and midwives, together with organisational supports and culture is essential to developing a productive and sustainable research environment. However, knowledge alone will not bring about change. This study will move beyond description of barriers to research participation for nurses and midwives and the promulgation of various capacity building frameworks to employ a theory driven action-oriented approach to normalisation of nursing and midwifery research practice. In doing so, our aim is to make possible the utilisation, generation and translation of practice based research that informs improved patient and service delivery outcomes. [ABSTRACT FROM AUTHOR]