This chapter aims to present the foundations and contemporary approaches of a knowledge vision of the firm, and frame this new perspective in the traditions of organizational theory. A pluralistic perspective of knowledge as justified belief is presented, and knowledge processes are described as cumulative, open-ended and context specific. The link between knowledge and organizational action is emphasized; the distinction between knowledge and information is made clear and the consequences this distinction are explored. The argument of embeddedness of a knowledge perspective in earlier organizational theories is presented, namely in scientific management theory and information processing views of the firm. Afterwards, the foundations of a knowledge vision of the firm are explored and the contemporary perspectives on the knowledge-based firm are developed. An attempt is made to clarify and relate the different concepts and approaches proposed in the last decade and present the current understanding on the knowledge-based firm. The chapter concludes that the emerging knowledge theory of the firm offers an integrative and important approach to the study of organizations, because it synthesizes recent findings in a number of different disciplines, offers a solution to some of the most important dichotomies of the field and presents a relevant view of organizations, capable of offering new insights on the functioning of organizations.