With　the　China＇s　transition　from　planned　economy　to　market-oriented　economy,　the　environment　facing　Chinese　enterprises　has　changed　greatly,　which　have　put　up　a　great　challenge　to　the　traditional　ways　of　business　operation.　However,　innovation　as　an　important　source　of　competitive　advantages　has　been　paid　a　lot　of　attention　by　academics.　Meanwhile,　knowledge　as　an　important　influencing　factor　in　innovation　has　also　been　attached　much　attention　by　scholars　in　recent　years.　In　this　paper,　we　first　summarize　the　definition　and　characteristics　of　tacit　knowledge,　then　the　relationship　between　tacit　and　innovation　is　analyzed.　To　manage　tacit　knowledge　effectively,　we　propose　that　organization　should　emphasize　the　management　of　tacit　knowledge　by　the　following　measures:　firstly,　exactly　identifying　and　acquiring　tacit　knowledge　in　organization;　then　actively　promoting　the　transfer　of　tacit　knowledge　in　firms;　lastly,　emphasizing　the　development　of　tacit　knowledge.　By　these　measurements,　the　whole　knowledge　level　in　organization　can　be　enhanced　greatly,　which　will　be　helpful　for　organizational　innovation　activities.