According to a consistent literature the creation of new products can be explain, to large extent, as a process of knowledge recombination. (Schumpeter 1934, Van de Ven 1986, Amabile, 1988, Hargadon and Bechky 2006). Recent studies on the activity of design firms (Hargadon and Sutton 1997, Stigliani and Ravasi 2012) show that new product development is strongly influenced by intertwined interaction of organizational routines and artifacts which organizations use to sustain the generation of novel knowledge. On this regard, in this paper, we discuss the role of physical artifacts in the process of new product design and development. The physical, tangible artifacts that we analyse are tools that organizations use in the regular work activity, as well as product components and collections of final products. We propose an approach based on a case study focused on the design of new products. In addition, a) we enrich the theoretical bases of our research question by taking into account the research in cognitive to explain how physical artifacts afford the creation of new products, and b) we reconnect this explanation to an organizational dimension. This methodology puts in evidence that, being tangible, physical artifacts hold unique properties that are critical in the processes of design and development of new product. First, physical artifacts are a material and “touchable” form of knowledge. Second, they incorporate in their physical properties (e.g. shapes, size, materials, colours, etc.) a large extent of the experience and the knowledge acquired and developed to design them. Third, and most important, this system of knowledge can be retrieved by interacting and manipulating with the physical artifacts. The paper describes and explains how individuals (i.e. designers) and organizations are able to use knowledge stored in physical artifacts to generate innovative knowledge incorporated in new physical artifacts. The findings of this paper explain why, in a world increasingly dominated by digital systems, physical artifacts still play a significant role. Physical artifacts (e.g. prototypes) help to identify inconsistencies and unforeseen interdependencies that can be overlooked by virtual representations. This argument offers an additional explanation for the large diffusion of fast prototyping processes, beyond the reduced cost of 3D printing technology, by acknowledging the advantages that physical objects provide when designers want to better understand the new objects they created.