Knowledge-Based Engineering (KBE) is a developing research field that studies technologies for capture and re-use product and process engineering knowledge to reduce time and cost of product development. KBE has held great promise since its inception, but evolution in the technologies and notions underlying KBE as well as significant challenges towards adoption have so far precluded its main-stream use. The main objective of this paper is to identify the conceptual foundations of KBE and focus on research issues within KBE, pointing out the challenges and pitfalls that currently prohibit a wider adoption of KBE while suggesting possible solutions and avenues for further research. In particular, the case-based ad hoc development of KBE and the ‘black-box’ nature of many KBE applications, subsequent difficulties with knowledge re-use, and insufficient quantification of the benefits of KBE are significant challenges towards a wider adoption of KBE. Methodological and technological advances address some of these issues, and propositions are made to further both qualitative and quantitative analysis and evaluation of KBE applications.