IT sourcing importance has steadily increased during the past ten years, both as a research field and as a management practice. Existing research has addressed many contractual aspects of IT sourcing. The presented research focuses on an increasingly important area within the IT sourcing field that has received little attention so far. This thesis studies the knowledge transfer between sourcing client and sourcing vendor. The subject of interest is particularly the knowledge transfer taking place in the transition of services from and to a vendor. Results of this study are summarized in a theoretic model described as a method. The research entails two research streams. During the case smdy research 13 IT sourcing cases are analyzed from a vendor and a cHent perspective. The analysis includes executive, management and employee interviews. During a piloting study several approaches to knowledge transfer in IT sourcing relationships were tested. The piloting study presents a total of six knowledge transfers. At the conclusion of the piloting study findings from the case smdy and the piloting study are combined with relevant hteramre sources to formulate a set of assumptions and constraints. These assumptions and constraints are later implemented in an exemplary knowledge transfer method suitable for use in IT sourcing projects, particularly as part of the IT sourcing transition phase. Such a method has shown to be effective and in some cases efficient to transfer knowledge in acmal IT sourcing initiatives. Therefore this thesis presents not only a conclusive account of knowledge transfer in IT sourcing initiatives but also provides a new practical theory of how such knowledge transfers can be managed in general.