There is a limited understanding of how knowledge transfer in deliberative planning takes place, especially in a rural context. This article examines the metamorphosis of knowledge that occurs in deliberative rural planning dominated by the community. Deliberation facilitates the transactive process in development planning through knowledge transfer between the planner and the community to ensure that the achieved policies are appropriate for the local conditions. By combining the notion of transactive planning from John Friedmann, organizational knowledge creation from Nonaka, and the knowledge transfer–acquisition loop from Luna Khirfan, this article proposes a model of knowledge transfer based on a case study of deliberative planning practice for rural development in Teluk Aru, Indonesia. Fourteen respondents from various groups were interviewed, including village government officers, subdistrict officers, district agency officers, and community members. The deliberation process took place in four transactive stages: (a) public involvement, (b) knowledge enhancement, (c) concept dominance, and (d) policy improvement. The participants need to go through all these stages to ensure that the achieved policies conform to substantive needs and the community’s wishes. The proposed model shows that not all participants are in the same situation when taking part in the deliberation. Some of them can internalize the knowledge gained, while others are in a zone that is not covered by knowledge transfer. This explains why rural planning does not bring in inherent knowledge, although many attended the deliberation. Power, deliberative ability, and seriousness in participating affect the process of knowledge transfer.