DYNAMICS OF KNOWLEDGE MANAGEMENT IN THE KNOWLEDGE INTENSIVE INDUSTRY.: The role of knowledge management in promoting sustainable competitive advantage in today’s highly volatile global marketplace has gained huge prominence. Despite the rich literature available on knowledge management, very few researchers have attempted to empirically examine the link between knowledge management and a firm’s intangible outcomes especially in Indian knowledge-intensive organizations. In order to address this gap, the present study explores the nature of relationship between key knowledge management processes and firm-related outcomes namely intellectual capital, innovativeness, and organizational effectiveness as perceived by the firms’ stakeholders. The study also examines the role of vital organizational and individual level factors in facilitating the knowledge management process. Data were collected from 345 respondents belonging to six knowledge-intensive firms (IT industry and R&D organizations) based in India. Differences in knowledge management practices were examined through ANOVA and the nature of association between the variables as well as mediating effects were analyzed using Multiple Regression Analysis. The results confirmed that knowledge management was strongly associated with firms’ intangibles. Organizational factors like culture, communication and deployment of KM systems and individual level factors like trust and supervisor leadership style emerged as significant enablers. The study has important implications for the practice of knowledge management and provides recommendations to ensure successful establishment of KM practices in knowledge-intensive firms.