Knowledge management (KM) and innovation have been recognized as critical success factors for libraries since 1990s and 1980s, respectively; however, neither is easily achieved. In this context, the current study aims to explore – using structural equation modeling – the extent to which various organizational, technological, and personal factors influence the creation of new knowledge and innovation in academic libraries. More specifically, vision and goals, culture, and structure (formalization and centralization) are explored in terms of organizational factors; IT support is examined in the technological context; and human resources skills and perceptions toward KM are investigated in terms of personal factors. For the collection of primary data a structured questionnaire was developed and distributed electronically to Greek academic library personnel. The final sample comprised 312 professionals from 28 libraries. Results indicate that a visionary leadership facilitates the creation of new knowledge through fostering a culture of collaboration, trust, and learning, providing opportunities for taking initiatives, and creating the appropriate technological environment. All these help libraries develop innovative services, thus responding more quickly and effectively to their changing external environment. Most importantly, library leaders should focus on building a common vision that will guide necessary practices and changes for innovation to be achieved.