Purpose: This empirical study is focused on the relationship between innovation capability (R&D and Human Resource innovation) and performance in knowledge-based service firms. Methods: We build research model to test how each of innovation capability on technology and human resource is influenced on their financial and non-financial performance in the knowledge-based service industries. Based on the previous research, we hypothesized the factors are regarded innovation capabilities of the firms as the scale of R&D and human resources. Because this study is especially targeted to the performance of knowledge-based service firms. With the survey on 424 main knowledge-based service firms, the multi-re- gression analysis was performed. Results: The result showed that the scale of R&D and human resources capabilities are main factors for knowledge-based service firms' performance, which reflects the current industrial structure. Conclusion: This study empirically demonstrated that human resources are most important to the growth of knowledge-based service firms.