The aim of this study was to determine the structural equation model of knowledge management and organizational innovation. The statistical population consisted of all employees of Sport and Youth offices in Khorasan Razavi province (N=380). The sample was selected by simple random sampling method using Morgan Table (n= 191). To collect data, two questionnaires of Knowledge Management (Sheron and Lowson) and Organizational Innovation (Omid et al.) were used. Face and content validity of these questionnaires was achieved by comments of sport management professors and Cronbach's alpha test was used to determine the internal reliability of both questionnaires as a=0.87 and a=0.83 respectively. The study used a descriptive and structural equation method and was conducted as a field study. Descriptive statistics and Kolmogorov-Smirnov test, Pearson correlation coefficient, regression analysis and path analysis with SPSS and LISREL were used to analyze the data. The results indicated a positive and significant relationship (r=0.684, P£0.01) between knowledge management and organizational innovation. Furthermore there was a positive and significant relationship between knowledge creation (r=0.464, P=0.006), knowledge absorption (r=0.567, P£0.01), knowledge organization (r=0.405, P=0.019), knowledge storage (r=0.629, P£0.01), knowledge distribution (r=0.785, P£0.01), knowledge application (r=0.669, P£0.01) and organizational innovation. The results of regression analysis showed that knowledge distribution (b=2.011, P=0.028) could predict organizational innovation. As knowledge management plays a significant role in improving organizational innovation, the authorities of sport organizations should create a friendly and reliable environment along with useful and beneficial communications in organizations and then should provide the ground for knowledge development through useful interactions.