This paper offers a detailed case study of the emergence, organization, and development of research and development at E. Merck. During the 1890s, revolutionary changes in the scientific knowledge base, especially the rise of bacteriological research and the entry of dyestuff producers into the pharmaceuticals market, combined with the financial distress Merck was undergoing to force the firm to reorganize pharmaceutical research as a corporate strategy. Consequently, between 1895 and 1898, Merck restructured its in-house research, forming closer ties with universities and other outside inven- tors. Merck depended on these sources to generate new products, while relying on in-house scientists to improve productive efficiency. A spate of new products was launched between the late 1890s and 1905, but, in the following years, resource constraints restricted Merck's innovative capacity.