This paper studies the initiation of a partnership between a corporation and a nongovernmental organization (NGO) for environmentally sustainable innovation, as well as its development over time. Proceeding from a dynamic capabilities approach, it provides a retrospective, longitudinal examination of a 10-year partnership between KLM Royal Dutch Airlines (KLM) and the World Wildlife Fund for Nature Netherlands (WNF), which promoted a market for aviation biofuels. The case study suggests that the progress of the partnership is determined by three specific dynamic capabilities of KLM and WNF: learning, coordination, and reconfiguration. The results reveal two microfoundations for each of these dynamic capabilities. For learning, these microfoundations are the sensing of strategic partners and the co-specialization of resources. For coordination, these consist of finding a fit between partners and having an integrated mission. Finally, the microfoundations of reconfiguration are the fostering of an institutional dialogue and the setting of new industry standards. This study is beneficial to scholars as it opens a research avenue concerning the dynamic capabilities and microfoundations that support corporate-NGO partnering for environmentally sustainable innovation. Practitioners can use these dynamic capabilities and microfoundations as guidelines for developing their own specific corporate-NGO partnerships.