This paper offers a conceptually novel contribution to the understanding of the distinctive governance challenges arising from the increasing reliance on formalized knowledge in the governance of research activities. It uses the current Australian research governance system as an example--a system which exhibits a comparatively strong degree of formalization as to its knowledge mechanisms. Combining theoretical reflections on the political-administrative and epistemic dimensions of processes of formalization with analyses of interview data gathered at Australian universities, it is suggested that such a strong reliance on formalized knowledge has rather ambivalent governance ramifications. On the one hand, it allows for a seemingly rational and efficient form of the control and coordination of research activities. Yet on the other hand, it also increases the risk that knowledge is used in governance contexts in superficial, unconsidered and ultimately unreasonable ways. It is further suggested that there are a range of indications that precisely such use elicits and reinforces a range of dysfunctional behaviors on part of relevant individual and organizational actors in the public science system.