In this paper, knowledge transfer between universities and business in the UK is examined at a number of different levels. The term ’knowledge transfer’ has different meanings in different contexts and so the meaning of the term from a UK perspective is discussed. As UK knowledge transfer is usually part of the innovation agenda, the meaning of ’innovation’ is also considered. A number of different activities, considered to be part of the third mission agenda, are often thought of as being capable of achieving knowledge transfer. The most common of these are described and the potential of each for actually achieving knowledge transfer is discussed. The UK government flagship knowledge transfer scheme, Knowledge Transfer Partnerships, is widely acknowledged to a very effective knowledge transfer paradigm. The Knowledge Transfer Partnerships methodology is described, and two case studies of projects that have been successfully carried out using this paradigm are presented. These case studies illustrate the point that while knowledge transfer was effectively achieved during the partnerships, innovation was also facilitated as a vital part in the process. The factors encouraging and supporting innovation during a knowledge transfer partnership are discussed. The conclusion is drawn that the knowledge transfer partnerships methodology forms a framework exhibiting a number of features that makes it more likely that innovation will arise, and that it is this combination of knowledge transfer and innovation that makes the scheme so effective and successful.