Knowledge is a foundation of nation building. The discipline of knowledge management has become a hot topic in business because of its prospects for dramatic improvement in organizational effectiveness. Higher education institutions are in the knowledge business, since they are involved in knowledge creation and dissemination and learning. This paper is an attempt to examine the applicability of the concepts of knowledge management to higher education institutions in the Sudan. Identifies a number of existing facilities, systems or projects which contribute to knowledge management in higher education, such as libraries, and electronic collections of learning materials, networks for e-mail communication, and management information systems which provide data on the student profile. Then considers the challenges associated with the creation of a knowledge environment in higher education, and explores the opportunities offered by viewing knowledge as an asset. It discusses the distinction between knowledge, information and data, definitions of Knowledge (explicit and tacit knowledge and the distinction between them). Elaborate brief information about knowledge management; background information about higher education in Sudan.