School-based learning communities, which include a variety of learning activities, exemplify a bottom-up approach to knowledge growth for teachers. Drawing on the perspective of organisational knowledge, this paper explores the dynamic processes and effects of knowledge development among teachers in school-based settings. Thirty-one secondary school teachers in Shanghai, China, participated in this qualitative study. The findings showed that for teachers in China, school-based knowledge development was characterised by strong self-knowledge and local knowledge for enriching knowledge base of individual teachers. However, the construction of collective knowledge for exploring new practices at group level and the creation of system knowledge for transforming existing practices at school organisational levels have been insufficiently emphasised. The uneven knowledge development situated in school contexts tends to produce tension between teachers' short-term adaptation and their long-term professional innovation. This study further discusses the implications for optimising the structure of knowledge development within the school organisations.