Purpose-This study aims to evaluate the effects of KIBS on innovation outcomes in micro firms that build machine tools according to the categories of KIBS. Theoretical framework-This article not only contributes to the theory on the innovation process by reinforcing the arguments that micro firms can achieve innovations, but also to the idea that KIBS have a positive influence on technological and non-technological innovation in manufacturing firms. Design/methodology/ approach-To achieve the objective of the study, the Mann-Whitney U Test was used as the analysis technique. A survey was carried out to collect data from 40 micro firms that build machine tools located in the Basque Country (Spain) and Emilia-Romagna (Italy). Findings-The results suggest that KIBS have positive effects on innovations in manufacturing firms. However, there are differences according to the categories of KIBS. For instance, T-KIBS favour technological innovation, while P-KIBS and C-KIBS affect non-technological innovation. In addition, ICT services also have a positive relationship with non-technological innovation. We conclude by highlighting the importance of T-KIBS to confront the challenges of Industry 4.0 and the need for further research to determine the role of KIBS in the context of the Fourth Industrial Revolution. Practical & social implications of the research-Micro firms need to enhance their absorptive capacity by increasing ICT and R&D investments, to confront the challenges of Industry 4.0, and given the fact that industry is beginning to incorporate more and more codified science-based knowledge. Perhaps hiring T-KIBS would be an appropriate decision for micro firms. Originality/value-This study contributes to the advancement of research involving different category of KIBS and their effects on manufacturing firms' innovation, especially in micro firms that build machine tools.