Drawing on the micro-foundations view of strategy, we examine the role of individuals in organizational learning and reveal the micro-macro interactions underpinning the emergence of a firm-level absorptive capacity. Whereas most of the absorptive capacity research focuses on interaction of external and internal environments, we emphasise the interplay between organizational and individual levels of absorptive capacity. We find that the nature of knowledge, the role of individuals and their social interactions are explicitly addressed in the seminal works of Cohen and Levinthal. However, these micro-level considerations are insufficiently problematized in subsequent research. This neglect has resulted in limited explanations of how absorptive capacity emerges as an organizational-level phenomenon. In this study, we employ a longitudinal case study design to explore the role of individual learning in the emergence of a firm-level absorptive capacity. We selected one multinational, knowledge intensive firm as our research setting. Data has been collected over a ten-year period. The focal firm operates in a mature industry, experiences technological disruptions and global pressure to innovate, and, hence, provides opportunity to explore how absorptive capacity emerges over time as a consequence of individual’s learning. Based on a longitudinal case study, we re-conceptualize absorptive capacity as a set of three, sequentially inter-linked learning processes in which individual and organization interact and suggest three propositions for further empirical research. We show how absorptive capacity emerges into an organizational learning capability that involves the micro-level knowledge processes that underpin absorptive capacity of an organization. Our findings reveal how tacit, situated, and distributed organizational knowledge affects the development of absorptive capacity as an organizational learning capability. This is achieved by distinguishing between individual- and organizational-level attributes of absorptive capacity, and through examining their dynamic interactions within each phase of absorptive capacity process—i.e., the recognition of value, the assimilation, and the application of new external knowledge to commercial ends.