Due to population growth and evolving demands for flexible premises, the design and construction of school facilities is currently a highly prioritized activity for many Swedish municipalities. However, previous research has found that facilities management (FM) knowledge is rarely integrated in the design of schools, resulting in construction deficiencies, high lifecycle costs and lower user functionality. The propensity to integrate FM knowledge in school projects varies greatly across Swedish municipalities, but the underlying factors shaping such organizational capabilities are less studied. In response, this study investigates how Swedish municipalities are currently organizing the integration of FM knowledge in the design phase of schools. The case study includes three municipalities of different sizes, where 18 interviews were performed with 22 representatives from users, operations and maintenance, construction project management, procurement and top management. To analyse the findings, a framework based on knowledge management was applied. The findings showed that FM knowledge is increasingly translated into codified processes and project planning standards and guidelines, but that personalized knowledge still plays an important role. Further, knowledge sharing in this field is complex and municipalities still face challenges despite improvement efforts. Thus, there is considerable potential to strengthen knowledge codification and sharing between municipalities and on the sector level. The study also points at the importance of studying knowledge governance at higher municipal levels, where many key organizational decisions are made.