This study contributes to the development of the knowledge management and strategic compensation literatures through developing the linkages between them. The study sample comprised of 301 employees from universities of medical sciences in Iran. Multiple and simple linear regression and path analysis were used to test the direct and mediated relationships among the variables. Results highlighted significant relationships between (a) strategic compensation practices and affective organizational commitment, (b) affective organizational commitment and knowledge sharing, (c) strategic compensation practices and psychological contract, and (d) psychological contract and knowledge sharing. Results revealed that strategic compensation practices are positively related to affective organizational commitment and psychological contract. In addition, the results provided evidence that affective organizational commitment and psychological contract have a significant mediating effect on the relationship between strategic compensation practices and knowledge sharing. Managerial and practical implications of the findings are highlighted.