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The National Health Service (NHS) in England and Wales has embarked upon a radical and far–reaching programme of change and reform. However, to date the results of organizational quality and service improvement initiatives in the public sector have been mixed, if not to say disappointing, with anticipated gains often failing to materialize or to be sustained in the longer term. This paper draws on the authors’ recent extensive research into one of the principal methodologies for bringing about the sought after step change in the quality of health care in England and Wales. It explores how private sector knowledge management (KM) concepts and practices might contribute to the further development of public sector quality improvement initiatives in general and to the reform of the NHS in particular. Our analysis suggests there have been a number of problems and challenges in practice, not least a considerable naïvety around the issue of knowledge transfer and ‘knowledge into practice’ within health care organizations. We suggest four broad areas for possible development which also have important implications for other public sector organizations.