This study shows that effective knowledge management is essential in a creative knowledge environment of R&D groups in cutting-edge fields such as biotechnology. To a great extent, knowledge management is revealed as a group leadership task. Moreover, group leaders emphasize group organization as a way to generate ideas, while group members are concerned with creative leadership. Group climates are unanimously perceived to be conducive to creative output. Theoretical starting points taken in creativity are seen as fostered by the environment rather than by individual characteristics. Data were collected by semi-structured, oral interviews (N = 84) with group leaders and group members at universities and biotechnical companies in Sweden. Data were analysed by content and categorized accordingly. Future research on creative micro-environments should focus on leadership issues and knowledge management.