The purpose of this paper is to examine the impact of two kinds of experiential knowledge on the knowledge development and innovative product development (IPD) of internationalising small and medium-sized enterprises (SMEs). From this examination, six hypotheses are generated. The results of a linear structural relations (LISREL) analysis of 188 SMEs show that experiential knowledge - in the shape of relationship knowledge and network knowledge - has a direct effect on the knowledge development of internationalising SMEs and their foreign customers and an indirect effect on IPD. Resource-constrained SMEs, thus, use experiential knowledge acquired from foreign business relationships as a means to enable knowledge development, leading to innovative activities like IPD.