This study aims to determine the effect of knowledge sharing on employee performance with individual innovation capabilities as a mediating variable at Muhammadiyah’s Universities in Yogyakarta. The sampling method used in this study is non-probability sampling, named the purposive sampling technique. The number of samples in this study were 187 respondents who were permanent lecturers with more than one year of service in each Muhammadiyah’s Universities in Yogyakarta. The data is obtained directly by distributing questionnaires. Quantitative data analysis techniques in this study used the structural equation models with the help of Amos 22 software. The results of this study prove that knowledge sharing has a positive and significant effect on individual innovation capabilities, individual innovation capabilities have a positive and significant effect on employee performance, knowledge sharing has a positive and significant effect on employee performance, and individual innovation capabilities are able to mediate the effect between knowledge sharing on employee performance.