This paper explores the theoretical foundations of the concept of entrepreneurialism in universities and the contribution it can make to the knowledge society. It reviews the concept as an economic phenomenon and draws a distinction between the use of the term in economics and its use in higher education and that in higher education it can be seen as a contested idea which can in some circumstances be destructive of academic values. On the other hand it can strengthen institutional autonomy and can be an enabling process which stimulates research and innovation. Barriers to entrepreneurialism at national and institutional levels are noted and the important area of risk. Two particular ideas are discussed, the concept of the academic entrepreneur and the relationship between the new emphasis on universities’ regional role and the nature of the entrepreneurial university.