The concept of knowledge co-production is used in health services research to describe partnerships (which can involve researchers, practitioners, managers, commissioners or service users) with the purpose of creating, sharing and negotiating different knowledge types used to make improvements in health services. Several knowledge co-production models have been proposed to date, some involving intermediary roles. This paper explores one such model, researchers-in-residence (also known as ‘embedded researchers’).In this model, researchers work inside healthcare organisations, operating as staff members while also maintaining an affiliation with academic institutions. As part of the local team, researchers negotiate the meaning and use of research-based knowledge to co-produce knowledge, which is sensitive to the local context. Even though this model is spreading and appears to have potential for using co-produced knowledge to make changes in practice, a number of challenges with its use are emerging. These include challenges experienced by the researchers in embedding themselves within the practice environment, preserving a clear focus within their host organisations and maintaining academic professional identity.In this paper, we provide an exploration of these challenges by examining three independent case studies implemented in the UK, each of which attempted to co-produce relevant research projects to improve the quality of care. We explore how these played out in practice and the strategies used by the researchers-in-residence to address them. In describing and analysing these strategies, we hope that participatory approaches to knowledge co-production can be used more effectively in the future.