Theoretically speaking knowledge sharing seems relevant for innovations in general. Yet, there is no adequate understanding of how knowledge sharing can develop green innovation in SMEs. This paper focuses on how internal and external knowledge sharing intercede green innovation and ponders on how it affects the organization performance. First, the empirical results show that all types of external knowledge don’t convey the same green innovative outputs. Second, they reveal that the success of the innovation process is strongly impacted by the access to knowledge sources but above all by the combination of internal and external knowledge in each phase of the green innovation process. The success of green innovations unveils the organizational absorptive capacity of external knowledge and their transformation into internal skills. Eventually, the risks associated with knowledge transfer can break the positive relationship between green innovation and the firms’performance. It also leads to the financial failure of green innovations.