Introduction: Knowledge management is a significant determinant for the survival of organizations.Identification of key success factors and an effective approach facilitate decision making on knowledge management. This study aimed at identifying factors and indexes for effective implementation of knowledge management in hospitals to investigate their relationships through a conceptual model and confirmatory factor analysis technique.Methods: This study was divided into two parts. The first part was exploratory which involved a literature review and an exchange of ideas with experts to identify indexes. The second part was a survey which included data collection through a questionnaire and the use of structural equation modeling for data analysis.The population consisted of managers, vice-chancellors and physicians at public and private hospitals in Tehran. The samples were selected randomly. LISREL software was used for data analysis.Results: According to the results, four factors of process, structural-cultural, technological, and managerial capabilities were effective in knowledge management at the significant level of 0.01, and managerial capability had a mediating role. Furthermore, the presence of clear objectives at the beginning of a knowledge management project, available information technology infrastructure, employment of a special team for knowledge management implementation and participation, and the support from senior managers appeared to be the most effective factors.Discussion: According to the results, all four factors influenced the effective implementation of knowledge management in hospitals and deserve proper attention. Previous studies showed disproportionate growth in technological factors whereas other factors were overlooked.