Knowledge-based competition has magnified the importance of learning alliances as a fast and effective mechanism of capability development. This case presents a technology transfer project from a university's engineering research center to a private firm to illuminate learning and knowledge-based determinants of the outcomes of such projects. In this paper, project success and effective knowledge transfer are used interchangeably to indicate a relatively high level of achievement of intended as well as the unintended benefits to the recipient firm. The main focus of this paper is on the contribution of prior related knowledge and the learning processes and activities, performed by the recipient firm, to such benefits. Based on the results of the case study, this paper draws several implications that differ from those prevailing in the literature on organizational learning and technology transfer, proposes ideas for future research, and makes practical recommendations for managers.