In Chapter 5, Leo Leung and K.F. Lau examine the role of trust in knowledge generation and dissemination. Distinction is made between perceived trust at interpersonal level and inter-organizational level (or group level). Two strands of research streams are employed to understand the role of trust in knowledge management process at these two levels. First, social exchange theory is used to explore the interactions among individuals in developing trust at interpersonal level. Then, transaction cost analysis is adopted to investigate the role of trust as a coordinating mechanism in organizing functional activities within and between organizations in addition to the use of either market or hierarchy. Both theories provide a conceptual foundation to understand the development of trust in facilitating knowledge creation and transfer. Different forms of trust may emerge throughout different stages of the knowledge management process. Developing unconditional trust requires time, costs and commitment of resources. Some empirical research studies have demonstrated a positive relationship between trust and knowledge generation/dissemination. An appropriate organizational setting such as team orientation, market-oriented culture and open-communication climate is important to trust-building. Various strategies for building trust are discussed at the end of this chapter.