The purpose of this study is to demonstrate that bidirectional knowledge transfer between IT service providers and client firms is critical for achieving successful information systems outsourcing outcomes. While prior research has primarily focused on the unidirectional transfer of knowledge from external experts to project teams or internal users, this study is significant in that it examines how mutual knowledge transfer occurs and affects information systems project performance, given that project teams executing actual information systems outsourcing development projects must operate through collaborative work between external experts and participants from the client firm. To this end, surveys were collected from practitioners at both client firms and IT service firms across 282 completed IT outsourcing development projects, and hypotheses were tested using the partial least squares (PLS) method. The results showed that seven of the eight proposed hypotheses were supported at the 0.01 significance level. The empirical analysis confirmed that knowledge transfer in information systems outsourcing projects must occur not only from IT service providers to client firms but also from client firms to IT service providers. Ultimately, in information systems projects, it is not merely about transferring the IT service firm's business capabilities and IT usage skills; because the IT service firm must understand the client firm's processes, receiving knowledge from the client firm is essential. The contribution of this study lies in demonstrating that knowledge transfer in outsourcing contexts must occur bidirectionally—from the IT service firm as well as from the client firm.