Abstract: With the prominent benefit of knowledge capital, the level of cooperation among firms is upgraded constantly. Knowledge collaboration, aiming at collaborative innovation among the upstream and downstream firms, has become an important approach of promoting the whole competitive advantage in supply chain. This paper proposes a theoretical model of knowledge collaboration in supply chain based on the contract theory and relationship exchange theory. Using the methodology of Structural Equation Modeling, the empirical results of 288 equipment manufacturers in Henan province show that the effect of relational governance is more significant in the process of strategic collaboration of knowledge in supply chain. In addition, the high degree of contractual governance will prejudice knowledge sharing, innovation and collaboration on account of the special character of knowledge exchange and the context of present Chinese culture.