The knowledge economy has come a long way before becoming one of the fundamental concepts in scientific and political discourse. The World Bank and the OECD analyze the level of development of the knowledge economy at the global level. However, the transformation of the economy at the regional level is also very important, largely because of the general tendency towards regionalization. This issue is particularly acute for emerging and post-communist countries (including Russia), which are in the process of transition to a market economy. Grounding on the World Bank’s Knowledge Economy Index indicators, the authors developed the Russian Regional Knowledge Economy Index (Russian RKEI). The authors allocated the leading and lagging groups of regions regarding the knowledge economy development as well as the fastest-growing regions. The authors identified critical success factors in the modernization of regional economic systems. Besides, the authors marked the negative trend in the development of the knowledge economy in more than half of Russian regions. On the one hand, this is due to the economic crisis and a reduction in investment; on the other hand, institutional problems continue to restrain economic development. The results can be used in further theoretical and applied studies for both Russia and other transition economies. © 2019, Springer Science+Business Media, LLC, part of Springer Nature.