Inter-organizational knowledge sharing and innovation are critical for organizational survival, and innovation processes involve not only techniques and experiment, but also knowledge-based processes to promote new behavioral models. However, there are limited studies on how different types of knowledge management (KM) applications fit the business context and achieve innovation through inter-organizational knowledge sharing. This paper studies the effects of inter-organizational KM on strategic knowledge sharing among allied organizations for innovation to understand the correlation between inter-organizational KM applications in line with factors of KM governance and inter-organizational innovation. A multiple-case study on two Asian companies, with multi-criteria decision-making (MCDM) questionnaire design for interviews and focus group discussion was adopted to collect and analyze the data. The findings address how organizations could adopt inter-organizational KM approaches and practical principles to improve the realization of innovation and serve as guidance for organizations in strategic alliances to employ inter-organizational KM for improving innovative performance.