Business adopts heavily investments in information technology to maintain their customer's loyalty in the electronic business environment. This study contributes to investigate the impact of IT- based knowledge processes as independent constructs (knowledge discovery, knowledge capture, knowledge sharing, and knowledge application) on electronic service innovation and electronic loyalty in the telecommunications sector in Jordan. It also examines the mediating role of electronic service innovation between independent constructs and the dependent one. Data were obtained from a purposive sample of (175) respondents using a questionnaire developed for this purpose. It was found that there is a significantly direct positive impact of knowledge management processes (IT-KD, IT-KC, IT- KS, and IT- KA) on service innovation, ITknowledge sharing (IT-KS) has a significantly direct positive impact on electronic loyalty and positively indirect impact on e- loyalty through e- service innovation as a mediator factor, in addition, there is significantly positive impact of e-service innovation on e-loyalty. In contrast, there is not significantly positive impact of (IT-KD, IT-KC, and IT- KA) on e-loyalty through the e-service innovation as a mediator. Therefore, the researched companies should be careful about how to increase e - loyalty by providing better services comparing with competitors in the same industry.