Studies on knowledge creation are limited in general, and there is a particular shortage of research on the topic in small and medium-sized enterprises (SMEs). Given the importance of SMEs for the economy and the vital role of knowledge creation in innovation, this situation is unsatisfactory. Accordingly, the purpose of our study is to increase our understanding of how SMEs create new knowledge. Data are obtained through semi-structured interviews with ten managing directorsof German SMEs operating in the building and construction industry. The findings demonstrate the influence of external knowledge sources on knowledge creation activities. Even though the managing directors take advantage of different external knowledge sources, they seem to put an emphasis on informed knowledge sources. The study´s findings advance the limited body of knowledge regarding knowledge creation in SMEs.