This research aims to explore the influence of knowledge management capabilities on organizational performance, especially in the context of Batik MSMEs in Klaten, Central Java, Indonesia. This research uses a purposive sampling technique. Data was taken using a questionnaire with a total of 60 respondents. This research involves independent variables, namely knowledge management capability, the dependent variable, namely organizational performance, and the mediating variable innovation. The data analysis technique used is smartPLS analysis. The results of this research show that knowledge management capability has a positive effect on organizational performance, knowledge management capability has a positive effect on innovation, and innovation has a positive effect on organizational performance. Innovation can mediate the influence of knowledge management capabilities on organizational …