There are a variety of definitions of knowledge transfer, and differing viewpoints as to the extent to which it is possible to establish a difference between knowledge transfer and technology transfer. By tapping into the positions taken by parties into the knowledge transfer debate, this chapter examines the main characteristics of these two different, albeit related, concepts. It goes on to propose a theoretical model in conjunction with the results of a preliminary field survey (details of which follow). This model is a contribution to extensive empirical work that has to be undertaken in order to assess the impact of university-industry interactions, especially in the Central, eastern and south eastern European countries (CESE) countries. The chapter then offers policy recommendations aimed at forging even closer ties between HEIs and regional small and medium-sized enterprises in European transition economies.