Today, many organizations have implemented knowledge management system (KMS) to facilitate activities in achieving their business objective and goal. Despite of the benefits that have been given by the system, its adoption and frequent use remain challenges. As acknowledged that KMS adoption is a complicated and context dependent, it is merit to investigate in understanding the phenomenon in a real setting. The purpose of this paper is to understand the nature of KMS adoption and diffusion in organization with the aim to provide recommendations which helping to increase adoption and utilization. The generated grounded results offer not only the identified factors and processes that could possibly lead to adoption but also those that make its diffusion and finally become part of daily practice. © 2011 Springer-Verlag.