Abstract: Many has talked about the definition of knowledge management and the world has been seeing that people are getting more and more aware of the importance of knowledge management (KM). This studywill study the factors influencing ICT adoption for companies and investigate the influences of ICT on knowledge management. Questionnaire survey is conducted to study the adoption of ICT for SME`s in Malaysia. ICT are classified into three types: data acquisition technologies, information technologies and system technologies. The influencing factors include technological, organizational and environmental characteristics. Effective knowledge management is measured based on tacit and explicit knowledge transfer. It can be found that adopting ICT will provide effective knowledge management and the adoption of ICT is influenced by technological, organizational and environmental characteristics.