Background:  The reallocation of resources is changing with the rapid growth of business and the changing products and technologies in most countries around the world. Information technology (IT) outsourcing is one way to access resources efficiently. Meanwhile, software and IT service providers, in particular, rely significantly on innovation to stay competitive and fulfill their clients' continuously changing expectations (Blumenberg et al., 2009). Knowledge transferring is a source of innovation, which helps employees actively acquire their explicit and tacit knowledge from their clients to realize ambidextrous innovative performances. Purpose:   The goal of our research is to investigate the association between the two different knowledge transfer mechanisms from the clients to the suppliers, ambidextrous innovation and innovation performance of suppliers’ employees in the software and IT services industry. The research also aims to identify whether ambidextrous innovation has mediating effects on the relationship. On the basis of a literature review of the topic, a total of 17 hypotheses are proposed.  Method:   As for the research methodology, this research adopts a realist ontology and a positivist epistemology. Through a web-based questionnaire survey of 250 employees from the software and IT industries, the research collected relevant data about knowledge transfer, employees’ ambidextrous innovation, and employees’ innovation performance and the approach is purposive and snowball sampling. In addition, we conducted a pretest to ensure the web-based survey’s questionnaire is reliable and valid. SPSS 28.0 was used as the tool for data analysis, and the methods of analysis mainly included descriptive statistics analysis, reliability analysis, validity analysis, and correlation analysis and linear regression. Conclusion:  Our research established a framework to show the association between two types of knowledge transfer mechanisms, employees’ ambidextrous innovation and employees' innovation performance. It has been found that the transfer of explicit and tacit knowledge from clients to suppliers' employees has a statistically significant positive association with the employees' innovation performance in the suppliers’ companies of software and IT services industry. Furthermore, explicit knowledge transfer has a stronger association with employees' ambidextrous innovation compared to tacit knowledge transfer. The analysis also pointed out that exploratory innovation, rather than exploitative innovation, is proven to have a higher association with employees’ innovation performance. In addition, a mediating role of ambidextrous innovation between knowledge transfer and innovation performance is also identified in our research. Our research also took gender into consideration to examine the consistency of the results across gender conditions.