Unique knowledge and proprietary innovations are key to the competitive advantages on which most multinational enterprises (MNEs) are expected to base their initial international expansion. Moreover, their subsequent fortunes and survival typically depend on MNEs’ continued ability to upgrade and renew these advantages, as competition, imitation, and environmental change erode the value of existing ones. This chapter reviews key literatures around the nature, management, and effects of knowledge creation in MNEs. The chapter centers on the processes through which geographical patterns of international R&D have evolved, along with the structures, systems, and procedures through which MNEs have sought to govern and coordinate these activities. Finally, the chapter offers a summary and critique of the way that much of the inherited literature has portrayed and interpreted the strategic knowledge creation process in MNEs.