Embodiments of the invention provide a method, system and computer program product for the dynamic adjustment of a service level agreement (SLA) for a hosted computing environment based upon application capabilities. The method includes specifying in a user interface to the hosted computing environment one or more application components of an application to be hosted within the hosted computing environment. Thereafter, a resource utilization capability is determined for one of the components and a set of resource utilization options for an SLA for the application is filtered based upon the resource utilization capability of the component or components. One of the filtered set of options can be selected and the application is executed in the hosted computing environment. Finally, the utilization of resources accessible to the application is managed based upon the SLA during the execution of the application in the hosted computing environment.