Universities face new challenges in the knowledge economy, due to two underlying transformations. One is that universities have increasingly developed from bodies of professorial self-governance bodies towards a status as ‘complete’ organisational actors, able to develop and deploy organisation-level strategies. A second is that by becoming key players in the knowledge economy and responding to stakeholder expectations, universities also have taken on new missions in addition to teaching and research. We propose that a series of new challenges arise from interrelations between universities’ internal organisational dynamics and changes in their external relationships. Moreover, we outline the contributions to this special issue, each of which address a specific question through their respective conceptual discussion and/or in-depth examination of these challenges. We conclude with recommendations for future research on the roles of universities in the knowledge economy and for innovation. Specifically, we propose that future research should simultaneously tackle vital issues about governance of universities and their activities, while also further developing extant empirical work on the microfoundations of academic knowledge production and career dynamics.