Drawing on the relational and knowledge-based views of competitive advantage, this study links leaders' social ties and knowledge acquisition capability to competitive advantage of a firm. Specifically, it posits that leaders' business ties and government ties have differential effects on firm competitive advantage. It further posits that the effect of leaders' business ties on firm competitive advantage will be positively moderated by knowledge acquisition capability, and the effect of leaders' government ties on firm competitive advantage will be negatively moderated by knowledge acquisition capability. The hypotheses are tested based on a survey of 386 firms in China. The results provide support for the hypotheses.