The process of knowledge transfer in knowledge alliance is analyzed and studied in this paper systematically. Using dynamic game theory, dynamic game model of knowledge transfer between knowledge transfer and receiver is established, optimal strategies of both sides are found, and a perfect Bayesian equilibrium is achieved and some effective measures are put forward to promote knowledge transfer. This study shows that the optimal strategy (α*, β*) used by both sides of knowledge transfer could make knowledge transfer efficiency, knowledge sharing among businesses effectively, and is beneficial to realizing knowledge innovation value.