As with the rest of the world, schools in Hong Kong have undergone a series of educational reforms to raise accountability and quality assurance of education. Schools need to enhance their capability of problem-solving and decision-making for meeting this standard for sustainable development. Intellectual Capital (IC), as an intangible knowledge asset of school organisations, has excellent potential to promote sustainable school improvement. School leaders, teachers, and other staff members ought to realise the value of their knowledge and manage these intangible resources for effective production and application of IC since knowledge management (KM) is the critical strategy for schools to create knowledge assets for the development of IC. This chapter reports a case study of two Hong Kong secondary schools to reveal how school principals can practice KM to generate and apply IC to improve educational performance. Copyright © 2023 selection and editorial matter, Eric C. K. Cheng; individual chapters, the contributors.