This research seeks adaptability of e-government policy in Mongolia, based on comparative study with Japan by representing historical facts in logical and chronological sequences counting both nations'' culture, tradition and mentality. Research consists of 4 key parts. First, the research summarizes e- government literatures. Second, research reviews recent trends of the Mongolian public sector, ICT development and e-government, and conducts study on Japanese ICT sector, e-government with case studies on e-local government projects in Okayama prefecture and Yokosuka city. Third, the research analyzes Mongolian e-government key challenges in comparison to Japan. The findings of study suggest that Mongolian government must seriously take into reconsideration of working style, business process reengineering, human resource management and financing arrangements. Finally, research argues that what lessons can Japan offer us about e- government policies in general.