Over the past few years, knowledge has evolved as the most important asset organisations, especially large ones, have. Universities have always been in the knowledge business per se. Even if they are acknowledged as having different missions, all are closely related to the management of knowledge. Nowadays, the challenges that European universities face urge them to incorporate Knowledge Management (KM) practices in order to help them enhance their functions and be more competitive and transparent. This paper reviews the link between KM and higher education institutions, and investigates how KM can contribute to the different missions universities have and how it can help them to confront the challenges they face. It also reflects on the weaknesses encountered when KM systems are implemented in higher education. Last, the paper reports some examples of implementing KM practices by universities.