In order to comprehend the main features, advantages and shortcomings of the traditional and distributed product development an extensive multidisciplinary literature overview is given at the beginning of the thesis. Analysis of the activities, methods and tools included in development process resultet with the proposal of domain ontology as a base for the knowledge management and exchange among different participants. Therefore, the product knowledge vocabulary as the first step in building product development ontology has been defined as a desired research result representing the research aim and to constrain the research project. In the methodology for development of the vocabulary two steps could be identified: empirical research and computer implementation. Empirical research has included domain documentation analysis (theoretical models, industrial reports, software documentation), identification of the key concepts and relations between them, and classification of the concepts and relations into taxonomies. The existing achievements in developing of the Genetic Design Model System has been selected as a theoretical background of the presented research. GDMS has been selecetes because it seems to be able to capture the totality of results created in product development projects, and it is a more comprehensive comparing to the other design/product model systems that can be found in literature. After extraction of the vocabulary entities, the main concepts has been characterized and formally defined. As the result of the previously described process the vocabulary contents has been classified into six main subcategories divided between physical and abstract world. Categorization of the relations based upon logical properties of symmetry, reflexivity, and transitivity is one of the thesis results. The vocabulary has been evaluated by testing proposal reliability based upon method that takes in consideration the agreement of the relevant experts in the researched field and subtract the percentage of the agreement that can be expected from chance. As a next step in the research, the computer thesaurus has been created using the Ontoprise ontology development environment. Using the thesauri, the knowledge evolved during the real product development has been described, and created set of the concepts and relations instances has been used for the vocabulary model consistency checking and refinement. Dissertation finishes with the proposal of the methodology for the vocabulary implementation based on the three-tier architecture of the system for the knowledge management and exchange.