Purpose <p>This study aims to investigate the mediating role of knowledge transfer (KT) in explaining the interdependencies between Knowledge Management Enablers (KMEs) and Innovation Capabilities (ICs) within Egypt’s Telecom industry.</p> Design/methodology/approach <p>Using a cross-sectional survey, the authors collected data from 315 employees working at the leading four Telecom Companies in Egypt. The hypothesized model was analyzed using the partial least square structural equation modeling technique. Semi-structured interviews were conducted with 40 key positions and mirrored against the quantitative data. The qualitative data were analyzed using the thematic analysis technique.</p> Findings <p>The results indicate a significant positive effect of the KM enablers of T-shaped skills and leadership-style on workers’ ICs. The KMEs dimensions of organization culture, structure, IT-Support-T-shaped skills and leadership-style explain the KT mechanism. The relationship between the KM enablers of (organization culture, structure, IT-Support, and leadership-style) and workers’ ICs is mediated by the KT mechanism. The relationship between T-shaped skills and ICs is not mediated by KT.</p> Research limitations/implications <p>Limited attention, until now, is given to the KMEs, KT and ICs interdependencies. This study bridges this research gap by exploring how KM enablers (i.e., organization culture, organization structure, IT infrastructure, T-shape skills, and leadership-style) shape the mechanism of transferring knowledge within the organization, which generates ICs for organizations operating in dynamic environment.</p> Practical implications <p>The results provide managers with applicable recommendations for fostering KMEs, encouraging KT mechanisms, and enhancing workers’ ICs.</p> Originality/value <p>This research is among the first to significantly contribute to understanding how KT mechanism, as mediator, explain the interdependencies between KMEs and ICs in ever-changing business environment.</p>