This research aims to fill the research gap between human resource management, structural capital, relational capital and business innovation performance. The researcher argues that the performance of business innovation in Micro, Small and Medium Enterprises in Warembungan Regency is largely made possible by knowledge-based Human Resource Management Practices. Researchers have tested this idea empirically in survey data to 100 respondents spread across villages in Warembungan Regency using structural equation modeling (SEM) based on Partial Least Square (PLS). The method used in this research is non-probability sampling with purposive sampling technique. The results of this study indicate that knowledge-based HRM practices positively affect innovation performance and illustrate the important role of human resources in this relationship: knowledge-based HRM practices impact structural and relational capital and also affect innovation performance by increasing the structural and relational capital of MSME actors in Warembungan Regency District Minahasa, Indonesia.