Knowledge has been very important wealth to the mankind but there has not a knowledge theory existed yet till the present time. An attempt is thus made in the paper to present a framework of knowledge theory that includes two parts: fundamentals and the main body of knowledge theory. The first part is to deal with a series of basic issues such as the related concepts and definitions, the methods of representation, the measurements, the reasoning and decision rules. The second part is to explore the mechanism of knowledge formation based on information processing and the mechanism of intelligence formation based on the activation of knowledge. It is believed that the establishment of the knowledge theory will lay a solid foundation to the unified theory of information, knowledge, and intelligence and will greatly facilitate the effective utilization of information and knowledge, leading to the growth of the research in the field of intelligent machines.