The paper aims to fill in the gap of investigating the role of strategic project portfolio management and to introduce a case study that focuses on a new strategic project portfolio management model and its application at a Hungarian IT service provider company. The model integrates strategic management, project management and knowledge management in order to set up the strategic project portfolio and to support the successful planning and realization of strategic projects. There are several approaches to create an organizational strategy (Hunger and Wheelen, 2011). However, they all share a common feature that the foundation of a successful strategy is the analysis of internal conditions and external environment. The way, how the mission and vision statements, as well as the strategic goals are formulated, the strategy for business units are defined, and the operational plans are derived, varies from organizations to organizations. Even more different is, how strategic projects are identified. The main challenge is to create a project portfolio that is aligned with the organizational strategy and provides the balance between exploration and exploitation (Kaiser et al., 2015, Kerzner, 2017, Kopmann et al., 2017, Pemsel and Wiewiora, 2013, Pinto, 2019). The theoretical part of the paper introduces a new model of developing an organizational strategy and the strategic project portfolio. It is based on the traditional approach of strategic planning, and it is combined with the project planning processes. Scorecard systems provide the interface of these planning systems. Projects are directly linked to strategic goals and the project portfolio is managed at the strategic level. The practical part demonstrates how this model can be applied in an organization. A Hungarian IT service provider company was selected where the model had been introduced and project management office (PMO) had been created in order to conduct the strategic project portfolio. The new model introduction, the strategic project proposal selection process as well as the project-related knowledge management practice is investigated.