In the process of economic transition from a centrally planned economy to a market oriented one in Vietnam, Vietnam’s National System of Innovation (NSI) in general and industrial technology R&D institutes in particular have also undergone their institutional transformation in response to the changing conditions created the government policy and the market. The paper examines, in the context of the NSI, the transformation process of the industrial R&D institutions in terms of how their organizational learning capacity has been built towards changing their role and activities from being mainly knowledge creators to becoming knowledge brokers and mediators. This transformation involves not only organizational learning of the industrial technology R&D institutions but also the policy learning of concerned policy-making agencies. Both organizational learning and policy learning are fundamental conditions for a successful transformation of the industrial technology R&D institutes.