In the last years, a shift in the promotion of sustainable development in Higher Education from a focus on universities’ core areas of teaching and research to “whole institution approaches” with an emphasis on the operational management of Higher Education Institutions (HEIs) can be observed in different countries. With the aim to foster sustainability, HEIs have increasingly built cross-sectoral networks, involving not only academics but also practitioners in order to relate sustainability not only to research but also to outreach activities. Although there is an increasing body of literature evaluating such initiatives according to supposedly objective management criteria and indicators, there is still a lack of studies that investigate how the social meaning of knowledge production is (re-)negotiated in and through these partnerships. In this article, we analyze how individuals engaged in a cross-sector partnership make sense of the organizational dilemmas and ambiguities that stem from the complexity of working together across sectors in pursuit of an integrative approach to knowledge production. With the term “sector” we refer to the professional affiliations of the individuals involved in the partnerships, e.g., higher education, administration, formal education or non-governmental organizations. We focus on an illustrative cross-sectoral partnership: The Institute for Sustainable Urban Development (ISU), a collaborative project between Malmö University and Malmö’s city administration to facilitate research and planning collaborations between both organizations in respect to furthering sustainable urban (re-)development and higher education in Malmö, Sweden. By employing a constant comparative approach based on Grounded Theory to analyze data collected with focus groups, semi-structured qualitative interviews and document analysis, we claim that rather than entering a partnership with predefined identities, values and sectoral or professional preferences, individuals engage in a narrative struggle about the organizational character of their partnership. Accordingly, an important avenue for investigating cross-sector partnerships is to explore the constructive dilemma of different organizing principles in a cross-sector partnership, and the way people negotiate the boundaries between them. For the cross-sector partnership studied the constructive dilemma for those engaging in it was to separate and link project, organizational and network organizing principles in their work. Implementing whole institutions approaches in order to promote sustainable development in and through HEIs, would accordingly profit much from a deeper analytical investigation of the process of navigating professional identities and organizational narrative(s) in boundary-spanning, cross-sector partnerships.