Against a background of increasing international competition and rapid technological change, universities and industry have often engaged in collaboration as a means of improving cross-unit transfers of the resources, capabilities, and knowledge. Following this frontier, this study examines the effects of university and firm interpartner resource alignment and absorptive capacity on knowledge transfer performance from the university-industry (U-I) perspective. Regression analysis is used to testthe hypotheses in a sample of 120 Taiwanese firms. The research findings suggest that, interpartner resource utilization is positively related to U-I interaction; that when the effect of a firm's absorptive capacity is higher, U-I interaction is more favorable; and that U-I interaction is positively related to knowledge transfer performance. Our empirical results support the process-oriented view and indicate that U-I interaction plays the mediating role between resource alignment, absorptive capacity and knowledge transfer performance. The implications of this study are two-fold. First, it emphasizes the value of creative financial and general performance in knowledge transfer by incorporating the U-I interaction perspective. Second, the research results offer support for suggestions that interpartner resource alignment provides a necessary element for capacity and resource exchange. Hence, one interesting further research would analyze practical cases of some Taiwanese companies with the described approach. This is an important practical issue that should be examined in the future.