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The paper provides a critical and evolutionary analysis of knowledge management (KM) in the AEC (architecture, engineering, construction) industry. It spans a large spectrum of KM research published in the management, information systems, and information technology (IT) disciplines. An interpretive (subjectivist) stance is adopted so as to provide a holistic understanding and interpretation of organizational KM practice, research and models. Three generations of KM are identified and discussed. To sum up, to be effective organizations need not only to negotiate their migration from a knowledge sharing (first generation) to a knowledge nurturing (second generation) culture, but also to create sustained organizational and societal values. The latter form the third generation of KM and represent key challenges faced by modern organizations in the AEC industry. An evolutionary KM framework is provided that presents the three proposed generations of KM in terms of three dimensions that factor in (a) the capability of individuals, teams and organizations in the sector, (b) ICT evolution and adoption patterns, and (c) construction management philosophies. The paper suggests that value creation (third generation KM) is grounded in the appropriate combination of human networks, social capital, intellectual capital, and technology assets, facilitated by a culture of change.