This study examined the readiness of Ugandan universities to adopt Action Research (AR) as a mechanism for community engagement, with a case study of Metropolitan International University (MIU). Guided by three specific objectives — assessing faculty awareness and attitudes towards AR, evaluating institutional support structures for ARmediated community engagement, and examining the relationship between AR engagement and community engagement outcomes — the study employed a cross-sectional mixed-methods design involving 248 faculty members and 96 administrators drawn from MIU and five comparator universities using stratified random and purposive sampling. Quantitative data were analysed using univariate descriptive statistics, bivariate inferential tests (chi-square and Spearman's rho), and Structural Equation Modelling (SEM) with maximum likelihood estimation. Results revealed moderate levels of AR awareness (mean = 3.21 at MIU; 2.95 comparators) and a significant positive association between institutional support and community engagement readiness (r = 0.612, p < .001). The SEM model demonstrated acceptable fit (CFI = 0.94, RMSEA = 0.058) and confirmed that institutional support (β = 0.41), faculty awareness (β = 0.33), and administrative policy backing (β = 0.27) were significant predictors of AR readiness, which in turn significantly predicted community engagement (β = 0.52, p < .001). Administrative policy backing did not significantly predict community engagement directly (β = 0.21, p = .089). These findings underscore the need for deliberate institutional investment in AR training, research incentive structures, and community-university partnership frameworks. The study recommends mainstreaming AR in faculty development curricula, establishing dedicated community engagement offices, and revising university research policy to formally recognise AR as a third-mission activity.