Knowledge management is widely recognized as a means of improving software development outsourcing (SDO) success due to the high failure rate and knowledge-intensive nature of SDO projects. However, how knowledge is effectively managed in SDO arrangements remains a challenge. This study aims to systematically review knowledge management studies linked with SDO success and analyze 32 research articles published in peer-reviewed journals from 2001 to 2023. Furthermore, the study strives to uncover gaps and research opportunities in SDO from the perspective of knowledge management. The main findings of this study reveal that knowledge categories in SDO are based on traditional tacit and explicit dichotomies, and an outsourcing partner does not have the full range of knowledge needed for developing the software. Most studies show one-way knowledge flow, with knowledge transfer being the most researched knowledge management process. Additionally, the vendors’ perspective of SDO success is the most researched (47%), followed by clients’ (36%), and client-vendor (17%) perspectives, respectively. Furthermore, data collection from vendors and clients is primarily sourced from senior and middle-level business and IT/IS managers, while project managers are the primary focus from the client-vendor perspective. The study also demonstrates the specific knowledge items needed in the SDO context, the modes of knowledge flows, the key knowledge management processes, and SDO success dimensions from the perspectives of clients, vendors, and both. Then, it develops a holistic knowledge management-based SDO success framework. It suggests ample avenues for future research to improve SDO success from the perspective of knowledge management.