Based on enterprise knowledge theory,this paper endeavors on the explanation of the origin of enterprise's competitive advantage.Through the study of existing literatures,this paper puts forward a new concept of knowledge state,and the corresponding connotations and implications are also explained.The author firstly thinks that knowledge state is the origin of acquiring competitive advantage.Then,the related micro mechanism for enterprises to acquire the competitive advantages are analyzed,and the relationship between knowledge state and the formation of competitive advantages are probed from some angles such as innovation ability,study ability and the growth of enterprises.At last,the author deems that the knowledge state is a dynamically circling process;only through optimizing of knowledge state that the enterprise's sustainable competitive advantage can be guaranteed.