Abstract: The development of the internet has provided the strength of recessive "connection economy", which has changed the traditional management mode of organizations and the ways of innovation. It is worth further discussion on how to grasp this opportunity to promote the knowledge creation performance. Based on resource-based view and dynamic capability theory, this paper explores the triggering effect and upgrading path of enterprise internet capability on the knowledge creation performance under the internet background. Through the survey data of 399 organizations in China, we find that: different types of internet capability have different impact path on the transformation of knowledge creation. Internet infrastructure capability affects the knowledge creation performance both directly and indirectly through ambidextrous strategic flexibility; internet business spanning capability and internet proactive stance both affect the knowledge creation performance indirectly through ambidextrous strategic flexibility. Both reactive strategic flexibility and proactive strategic flexibility have a significant positive impact on transformation of knowledge creation. The information density of product chain has significantly moderating effect on the relationship between internet capability and reactive strategic flexibility.