Globalization has created new challenges for businesses to remain competitive. Nowadays, businesses have to face high competition between businesses and run the risk of losing their customers easily because most of them have difficulty in understanding and responding to rapid changing market trends. The growing importance role of knowledge has motivated businesses to move on from other management practices to knowledge management (Cho & Korte, 2014; Tubigi & Alshawi, 2015). Knowledge management is regarded as the capability to manage knowledge such as acquiring knowledge from either internal or external organization, converting it into new strategy or idea, applying and protecting it (Gold, Malhotra, & Segars, 2001). By adding the concept of knowledge management capability into operations, abundance of information of customers can be captured and this can further assist the service industry to improve on their overall service quality and faster service response time (Runar Edvardsson & Kristjan Oskarsson, 2011). Investigating on the relationship between knowledge management capability and organizational performance is essential as the findings can help the businesses to further explore the consequences of knowledge management (Liu & Deng, 2015). Besides, there is a lack of study that investigates the relationship between knowledge management capability and non-financial performance (Cho & Korte, 2014). Moreover, the findings of previous researches are still inconclusive with regards to the knowledge management capability-performance link which, some researchers found that not every dimensions of knowledge management capability is significantly correlated to performance (Mills & Smith, 2011). This study aims to bridge the gaps by examining the relationship between individual dimensions of knowledge management capabilities and a more specified organizat ional performance that includes non-financial performance indicators among SMEs in the service sector of Malaysia.