The purpose of this study is to examine the relationship between knowledge management and competitive advantage in a carpet company in Mashhad. In this study the components of knowledge management are formed from four components of knowledge acquisition, knowledge conversion, knowledge application and knowledge support and competitive advantage consists of three components of product differentiation, cost leadership and focusing on market. Statistical community consists of all managers including senior, middle and operational managers in this company. In this study due to the limited statistical community including thirty-six managers, the census method is used and all community has been studied. In this study two questionnaires have been used to collect data. Questionnaires used in this research are researcher made that after being designed by a number of specialists and experts they were examined by a pilot study and their views were considered in the questions. Due to the topic and hypotheses, the current study is an applied research that information has been collected by a survey method; but from the aspect of information analysis is exploratory and survey research. To analyze data in the study, two methods of descriptive statistics and inferential statistics are used. In the descriptive part, central indexes (mean) and dispersion (standard deviation) are calculated from the tables of frequency distribution. Also the related figures are plotted. In the inferential statistics part, to evaluate and analyze the study hypotheses, Pearson's correlation coefficient test was used due to variables normal distribution and interval scales. Also, to investigate the study linear model the stepwise regression method was used. In this study all hypotheses have been confirmed and the effect of knowledge management components on competitive advantage components was investigated.