The purpose of this study is to extend the existing knowledge of inter-firm knowledge transfer research and provide a deeper understanding of knowledge transfer practice in an alliance context, as well as the reasons for such a practice. This study reports on relevant results derived from semi-structured interviews with 16 top managers in a Chinese international joint venture (IJV) formed by two automobile companies, one in China and the other in the USA, conducting interactive cooperation and inter-firm knowledge transfer practices. It was found that the partners in this alliance brought together their complementary capabilities in automotive technology and management expertise to build an independent organization with its own board of directors and staff members to facilitate knowledge sharing and alliance learning. This consisted of these three elements: (1) Contracts and agreements that clearly articulated each member’s objectives and responsibilities involved in alliance knowledge transfer; (2) Inter-organizational knowledge transfer involving a set of communication and interacting knowledge procedures, such as identification, contribution and development; (3) Partnership evolution at the interfaces between the participating firms. These findings raise an important question of how to ensure satisfaction for inter-partner interactions and knowledge exchanges in the Chinese automotive industry context. Based on literature review tangible facts and interview interpretations, this paper provides a deeper understanding of the organizational activities involving cooperation and the dynamic knowledge transfer routines, which is a significant extension of past static cross-sectional conceptualisations. This paper proposes an inter-firm knowledge transfer and cooperative learning process emphasizing that the issue of sharing knowledge in IJVs and bringing IJVs into profitability requires partner companies to engage in inter-partner learning to benefit from the transfer of knowledge. A key implication for the firms, therefore, is the critical ability to deal effectively and efficiently with the transfer of knowledge resources and gaining a competitive advantage consequently.