This study investigates the factors influencing the adoption and diffusion of Knowledge Management Systems (KMSs) in Australia. The data was collected via a nationwide survey and was analyzed through partial least square (PLS) approach. The results indicate that external inspiring, organizational factors and task complexity are the significant factors that influence the perceived usefulness of KMSs which, in turn, significantly influences the intention to adopt a KMS and its diffusion process. Some unexpected results were also found. The paper highlights some important antecedents of KMS diffusion process which will be useful to the developers of KMS and various organizations embarking on the adoption of KMS