The healthcare industry produces a huge amount of data and information. The growing of number of patients, diseases, medical research areas as well as the rapid changes in the healthcare environment result in demands for better provision of quality healthcare information. Healthcare organisations use various information systems to support the management of knowledge and one example of such system is Medical Records System (MRS). In this paper we look at the extent doctors and medical practitioners use MRS to manage their knowledge and the challenges they face in doing so. Through an exploratory case study of a large Australian metropolitan hospital, a set of key factors was identified that may influence and inhibit knowledge management (KM) processes in health practices. These factors were then mapped onto the functionality of MRS providing a better understanding of the role of patients’ medical records as part of a comprehensive KM system.