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ABSTRACT In a competitive environment, the company is required to follow the strategies of its competitors. In order for information about competitors to be obtained quickly and then disseminated throughout the organization, the implementation of e-business needs to be done to support the creation of competitive advantage. The formulation of the problem in this study are as follows: (1). Is there any effect of knowledge management capability on e-business adoption in Medium-sized Enterprises in East Java? (2). Is there any effect of technology readiness on e-business adoption in Medium-sized Enterprises in East Java? (3). Is there an influence of the environmental context on e-business adoption in Medium-sized Enterprises in East Java? The design in this study is quantitative research. The design of quantitative research is done through the distribution of questionnaires to certain respondents according to the specified criteria. The quantitative research design used is causal research which is explanatory research. Causal research is research that aims to test the research hypotheses that are determined based on literature to answer the research problem formulation. The test results of the influence of the implementation of management practices on the performance of the company indicate that: (1). Simultaneously, shows that knowledge management technology readiness and envirimnetal context have a significant influence on e-business adoption. (2). Partially, it can be concluded that variable knowledge, variable technology readiness and environmental variables have a significant influence on e-business adoption. Based on this research, it can then be carried out further on the exploration of the types of e commerce used by MSME actors, and focusing on Small and Medium Enterprises (SMEs) who have adopted E Commerce in more complex forms. and e-business.