This study examines the transformative potential of generative artificial intelligence (GAI) on the knowledge management (KM) systems and capabilities in organizations. GAI enables efficient processing and summarization of an organization’s proprietary data, generating actionable outputs and further insights (i.e. new data) for its knowledge workers. This improved visibility and leverage to organizational data has the potential to establish a better understanding of what an organization knows and to discover and integrate latent knowledge, leading to, e.g. enhanced KM and better-informed, more consistent, and quicker decisions. However, to reap the potential benefits of GAI, organizations must go beyond the mere adoption of this new digital technology. Organizations should first prepare and transform themselves to enhance their readiness for integrating GAI into their knowledge-related processes and work practices. We argue that KM, both its capability and system views, takes a key role in this transformation. Accordingly, we describe how GAI augments organizational KM capabilities and systems, and how these capabilities and systems act as catalysts for successful GAI use and value creation. In essence, this study outlines the steps for successful KM and GAI integration in organizations and suggests alternative starting points and configurations to achieve it.