There is no credible methodology for knowledge management systems development (KMSD). We report on a KMSD approach that has emerged from an investigation based on action research and grounded theory into a number of business problems experienced by organizations. The KMSD approach is highly participatory, requiring full involvement of members of an organization. It has three interacting aspects: envisioning knowledge work behaviour, design of knowledge management system (KMS), and exploring technology options for supporting the KMS. In the first of these aspects, challenges and opportunities in an organization's current situation are analysed and an improved situation is envisioned to expose knowledge concepts and their properties. In the second, a logical design of a KMS is produced using knowledge entities, knowledge flows and knowledge interfaces; the design is guided and constrained by an organization's structure, culture, and resources. The third aspect is to do with introducing appropriate IT into KMS design, integrating organizational, social and technological aspects of the system. The paper describes this KMSD approach and how it emerged from both practical and theoretical investigation.