During the 1990's an increased debate concerning a new way of funding, organising and doing research is discernible. Characteristic elements in this are: collaboration between university and industry, context of application, user orientation and interdisciplinarity. A parallel development related to the environmental issues can also be distinguished, where the discourse of sustainable development has become the dominating political vision. How these changing contexts affect and influence a funding agency is analysed in this thesis. The source for the analysis is the Foundation of strategic environmental research, Mistra. Mistra was established in 1994 aiming at a renewal of Swedish environmental research, in which contributing to the vision of sustainable development is a central goal. Other characteristic objectives in Mistra are: solution orientation, user involvement, interdisciplinarity, and contributing to the competitiveness of Sweden. The main purpose of the thesis is to analyse ideas and notions about science and knowledge concerning the environmental problematic as viewed in Mistra. A specific interest is also directed to views and notions of the role of science in contemporary society. The main conclusion concerns awareness of epistemological issues in Mistra regarding different forms of knowledge and ways of doing research. This is especially apparent in the discussion related to evaluation of research, interdisciplinary, social sciences and user involvement. Moreover, I stress that this tendency also could be recognized in theories of knowledge production. Understanding Mistra as an example of contemporary knowledge production the post-positivist notions of knowledge, which is particularly argued for in theory of Mode 2, is therefore questioned. Consequently, issues of prerequisites and conditions of the occurrence of reflexivity and post-positivist epistemological thoughts are stressed and epistemological notions mirrored in contemporary knowledge production are discussed using the two concepts of unreflected ambivalence.