Despite　the　increased　research　attention　directed　to　the　importance　of　knowledge　protection　in　collaborative　business　partnerships,　such　as　IT　offshore　outsourcing,　the　extant　literature　offers　conflicting　views　on　whether　knowledge　protection　inhibits　project　performance.　Based　on　the　transaction　cost　theory　and　the　psychological　contract　theory,　this　study　investigates　how　outsourcer　knowledge　protection　affects　project　performance　through　partnership　quality　from　the　view　of　the　vendors.　Hypotheses　were　proposed　and　examined　using　data　from　180　IT　offshore　outsourcing　projects.　This　study　finds　that　knowledge　protection　reduces　partnership　quality　and　project　performance.　Furthermore,　a　vendor＇s　relational　contract　schema　strengthens　the　negative　effect　of　outsourcer　knowledge　protection　on　partnership　quality,　while　a　vendor＇s　transactional　contract　schema　weakens　the　negative　effect.　This　study　extends　our　understanding　regarding　the　effects　of　knowledge　protection　on　project　performance　and　has　important　implications　for　outsourcing　project　management.