Local universities play a guiding and supporting role in regional innovation systems. External environment is an important factor of university knowledge innovation, but university organization is the basic reason of knowledge innovation. University organizational transformation makes its core task and deep structure changed and then promotes the ability of knowledge innovation in universities. Knowledge innovation in American entrepreneurial university is to play a better role of the research university in a knowledge-based society, but knowledge innovation in European entrepreneurial university is to solve social problems. Based on the analysis of university organizational transformation about American model and European model, the research shows that the main approach of knowledge innovation in local universities is to build the knowledge-based entrepreneurial area, insist on problem-oriented knowledge innovation logic and build double-centered entrepreneurial university of academic and entrepreneur.