The “knowledge governance approach” is characterized as an emerging approach that cuts across the fields of knowledge management within open innovation and adjusts mutual behavior that parties taking participate in open innovation to be expected. The paper proposed that knowledge governance approach is positively related to open innovation, and then the research has explored the antecedent factors and working mechanism of knowledge governance within open innovation based on Grounded Theory. By way of literature analysis and qualitative research (deeply discussion numbered 27), the paper has derived four dimension of knowledge governance (knowledge property, knowledge activity parties, the exogenous and endogenous context of knowledge activity) and the categories of each dimension. The paper has considered that the knowledge governance is formed by the interplay between interactive value creation process at the knowledge property-level and cooperation unity achieving process at the knowledge activity parties-level. We develop two theoretical models, while one is for explaining the antecedent factors of knowledge governance within open innovation, the other is for explaining the mediating role of knowledge governance in the relationship between knowledge property and knowledge activity parties level antecedents. The paper has strengthened the function of quantitative research, and will be helpful in open innovation theory and practice.