The issue of what indicators are most appropriate in order to measure the performance of universities in knowledge transfer (KT) activities remains relatively under-investigated. The main aim of this paper is to identify and discuss the limitations to the current measurements of university–industry KT performance, and propose some directions for improvement. We argue that university–industry KT can unfold in many ways and impact many stakeholders, and that, especially in highly differentiated university systems, choosing indicators focused on a narrow range of activities and impacts might limit the ability of universities to accurately represent their KT performance. Therefore, KT indicators should include a variety of activities and reflect a variety of impacts so as to allow comparability between different institutions and avoid the creation of undesirable behavioural incentives. To illustrate these issues empirically, the authors discuss the case of the United Kingdom's Higher Education–Business and Community Interaction (HE-BCI) survey.