abstract While innovation and knowledge creation processes and context are interlinked in the real world, scholars frequently ignore or separate context from knowing due to an entrenched sense of ontological and analytical dualism. This paper builds on the organizational knowledge creation theory (Nonaka, 1994) to provide a holistic view of contextual innovation and knowledge creation processes. The phenomenon is demonstrated by a longitudinal case description of i‐mode mobile Internet innovation at NTT DoCoMo, a Japanese mobile communications company. This case explains how three key managers created and organized an interlinked system of shared contexts, calledba, that enabled the combination and open flow of diverse knowledge and led to the creation and launch of the i‐mode mobile Internet, which unites novel technologies and services. Managerial implications and limitations are discussed.