Abstract: This study aimed to determine the effect of Absorptive Capacity and Knowledge Sharing on the performance of women-owned SMEs group. The sample of this research was female business actor who joined in Alisah Khadijah group of ICMI Palembang as many as 138 business actors. Analysis of this research used Structural Equation Modeling (SEM) program with Lisrel Program. The result showed that Absorptive Capacity and Knowledge Sharing variable had positive and significant influence on Performance of SME group incorporated in Alisah Khadijah ICMI Palembang. Absorptive Capacity variable had more dominant influence on Performance than Knowledge Sharing variable.