This paper investigates how accessibility to knowledge is related to the new firm formation in Sweden. Utilizing municipal level data, the paper examines how and to what extent geographic proximity to establish-ments that are specialized in formal knowledge creation plays a role for the overall entrepreneurial milieu in a city region.　While measuring accessibility to knowledge at intra-municipal, intra-regional and extra-regional levels, the paper maps out the clustering patterns of new firms and ranks the municipalities by their perfor-mance in creating an entrepreneurial milieu. The clustering patterns of new firms highlight critical factors in new firm formation and entrepreneurial performance of regions.