Industrial cluster is basically related to the concept of knowledge management in that innovations are pursued through knowledge sharing and knowledge exchanges in the level of related industries or adjacent regions. Recently, assertions that knowledge management is worth of application in the level of an industry or regional industrial cluster appear in academics and practitioners. This study explores the characteristics and challenges of knowledge management when it is applied in the level of an industrial cluster. Critical concepts and research questions are developed from the review on previous studies and explored through interpretive case studies and in-depth interviews.