The present study purposes to examine the moderating role of absorptive capacity (ACAP) on the relationship between entrepreneurial orientation (EO) and technological innovation capabilities (TIC) among small and medium enterprises (SMEs) in the construction industry. Due to the critical role of SMEs in construction industry, the purpose of this article is to examine to what extent the externally generated knowledge manifested in ACAP can strengthen the relationship between EO and TIC. To validate the proposed model, self-administered questionnaire were conducted to gather data from SMEs owners, 249 questionnaires returned and used for statistical analysis out of 278 distributed. The outcomes of present research reflect that both of ACAP and EO have significant effects on TIC. Furthermore, the results indicate the moderating role of ACAP on the nexus between EO and TIC.