According to many thinkers, production of knowledge-based products and services comprises an essential component of knowledge economy. So that, supporting such economic activities has become a serious concern to governments. In Iran, this movement was fundamentally started by adopting Knowledge-Based Companies and Institutions Support Act of 2010. However, the first step toward realizing this purpose is to identify knowledge-based products and services. As of now, various methods have been presented for this purpose. Meanwhile, implementation of them has faced particular challenges, because these methods have been mainly based on industrial categorizations. This is while, products and services are regarded as the unit of analysis in related laws of Iran. In the present research, an attempt has been made to present criteria for identifying knowledge-based products and services. Classical grounded theory was used to approach this purpose. On this basis, theoretical sampling was performed via purposive judgment method, wherein 26 experts were interviewed. Then the relationship among the resulted concepts was investigated and organized into six constraints for identifying knowledge-based products and services. Finally, findings of this research were compared to the concept of dynamic capabilities and final theory was presented. The theory indicates that, knowledge-based products and services can be identified through investigating dynamic capabilities of majority of manufacturer of these products. Furthermore, the six constraints obtained in the present research were used in the revision process of the knowledge-based companies evaluation code, which was undertaken in 2016, with the criterion of "new companies entrance constraint" added to the knowledge-based companies and institutions qualification code under the title "imitability".