With the end of the Cold War, the North Atlantic Treaty Organisation (NATO) entered a process of transformation to adapt to an ever changing security environment. This continuous transformation process forms NATO´s large scale knowledge management intiative in reaction to the increasing requirement of new capabilities and the interoperability of Allied armed forces. An often overlooked area of this process, is the development of 26 multinational competence centres: the NATO Centres of Excellence (COEs). These competence centres represent a new model of multinational military organisations that support NATO transformation through knowledge exchange and capability development. Each centre is established on a specific functional area or profession, such as Cyber Defence, Military Medicine, or Civil-Military Cooperation. As a response to an increasingly downscaled NATO Command Structure, the COEs provide an alternative for nations to voluntarily participate in the development of specific capabilities. This sets the COEs apart from the formal hierarchies in NATO and offers a space for experimentation, multinational cooperation, and innovation. I argue that COEs are adopting an increasing role as service provider and reach-back organisations for niche-capabilities in a shrinking NATO Command Structure. Individually, each COE represents an important knowledge repository in its area of expertise. Collectively, the COEs form an organisational field that exceeds NATO’s remaining expertise in niche professions. How these organisations contribute to capability development and knowledge exchange, in the context of increased interoperability and transformation of Allied Forces, is the subject of this thesis.