The keen competition in today’s global market drives enterprises to launch highly innovative products much more quickly. Consequently, the critical success factors behind the development of successful innovative products must be investigated. To enhance product innovativeness and performance, many enterprises rely on their suppliers to support their new product development (NPD). By collaborating with suppliers, enterprises can focus more on their own core competencies and leverage their resources more properly. Previous studies on product innovation highlight the importance of enhancing the product development capability of enterprises by accessing external knowledge from other enterprises. Some studies consider suppliers are the most important sources of external knowledge. Previous studies have covered different means to achieve better supplier collaboration, such as supplier involvement, embeddedness, and integration. However, the antecedent of supplier integration in NPD in terms of knowledge management (KM) and new product development capability (NPDC) is not yet supported with strong empirical evidence. The traditional way of selecting suppliers by cost, quality, and delivery (CQD) is inadequate in today’s highly competitive global market. Aside from the conventional technological, RD, manufacturing, and financial capabilities of suppliers, enterprises are trying to select and collaborate with suppliers who have strong knowledge and product development capabilities. However, studies on knowledge and product development capabilities as antecedents to embed suppliers in NPD remain rare and lack empirical evidence. Therefore, this study investigates the role of the suppliers’ knowledge management capability (KMC) and NPDC as antecedents of supplier embeddedness in NPD by conducting a large-scale empirical survey with more than 210 enterprisers in the Pearl River Delta (PRD) of Southern China. The structural equation modelling analysis reveals that enterprises can enhance their competence in NPD through their proper integration with embedded suppliers who have strong KMC and NPDC. This finding supplements the extant literature and emphasizes the importance of KMC and NPDC as the critical success factors for embedding suppliers in NPD. Moreover, aside from the conventional approach of selecting and embedding suppliers on CQD, the KMC and NPDC of suppliers are also crucial to the success of NPD. This finding supplements the conventional CQD approach in supplier selection.