Knowledge is the core element of innovation, while entrepreneurship is the process of coordinating the discovery of market-related information and dispersed tacit knowledge (Sullivan & Marvel, 2011; Turner & Pennington, 2015). The knowledge-based view holds that an enterprise is an organization that processes and integrates knowledge. Thus, knowledge is the basic element of innovation-driven entrepreneurship. This theory is the basic theory used to build innovation-driven entrepreneurship theory and especially to reveal innovation-driven entrepreneurship’s internal mechanism. This chapter systematically reviews the knowledge-based view and its application in the field of entrepreneurship research. Based on this, the chapter explores its limitations in explaining innovation-driven entrepreneurship and suggests future research directions to further promote in-depth development of the knowledge-based view.