Abstract: There are three primary kinds of knowledge between parent and subsidiaries of Multinational Corporation, and the knowledge that those parent and subsidiaries devoted to has an important effect on their relations. Basis on the research of knowledge transferring process between parent and subsidiaries, a conclusion is drawn: the relations between parent and subsidiaries of Multinational Corporation will be changed with the knowledge transferring between them, and subsidiaries will play a more and more important leading role when their local knowledge bring into play increasing effects.