Abstract: It is important for a firm to acquire heterogeneous knowledge which exists usually out of the firm. However, it has not reached a consensus on how heterogeneous knowledge affects a firm to construct innovation capabilities in the extant literature for the limit of methodology. In order to identify the role of knowledge heterogeneity played in a firm’s innovation capability leveraging, an industrial cluster was taken to control the variable of heterogeneity of knowledge in-flowed. Using the relevant data of knowledge flow and innovation of 121 firms belonging to Anhui Bowang cutting tool industrial cluster, the hierarchical regressive model and Bootstrap method were to explore the effects of different modes of knowledge in-flowed using on a firm’ s innovation capability. It is found that a firm belonging to a specific cluster prefers to make use of knowledge spilled from other firms rather than that transferred from other firms. Furthermore, a firm prefers to have“free lunch”with least efforts under the condition full of relevant knowledge with less heterogeneity. Actually, moderately heterogeneous knowledge acquirement may activate a firm to conduct knowledge integration to leverage its innovation capabilities. The findings give an alternative explaining of sourcing for firms innovation capabilities’leveraging in a specific cluster from knowledge-based view, and disclose the micro-foundation of why firms in a cluster will become more and more homogeneous and result the phenomena of a cluster’ s lock down from the firms’behavioral perspective.