Abstract: Alliance firms’ knowledge generation strategies include knowledge creation within firm boundaries and knowledge acquisition from partners. Based on knowledge-based view and transaction cost economics, this paper examines how co-opetition influences firms’ knowledge generation strategies and how organizational ambidexterity (exploration and exploitation) interacts with co-opetition to affect knowledge generation strategies. Survey data from alliance firms in China demonstrate that exploration and exploitation influence the relationship between co-opetition and knowledge generation strategies in different ways. In particular, the moderating effect of both exploration and exploitation on co-opetition and knowledge creation is not significant. However, the moderating effect of exploitation on the relationship between co-opetition and knowledge acquisition is more significant than that of exploration. The results provide advices for alliance firms to choose effective knowledge generation strategies.