After　a　short　introduction　to　the　concepts　of　knowware,　knowware　engineering　and　knowledge　middleware,　this　paper　proposes　to　study　the　software/knowware　co-engineering.　Different　from　the　traditional　software　engineering　process,　it　is　a　mixed　process　involving　both　software　engineering　and　knowware　engineering　issues.　The　technical　subtleties　of　such　a　mixed　process　are　discussed　and　guidelines　of　building　models　for　it　are　proposed.　It　involves　three　parallel　lines　of　developing　system　components　of　different　types.　The　key　issues　of　this　process　are　how　to　guarantee　the　correctness　and　appropriateness　of　system　composition　and　decomposition.　The　ladder　principle,　which　is　a　modification　of　the　waterfall　model,　and　the　tower　principle,　which　is　a　modification　of　the　fountain　model,　are　proposed.　We　also　studied　the　possibility　of　equipping　the　co-engineering　process　with　a　formal　semantics.　The　core　problem　of　establishing　such　a　theory　is　to　give　a　formal　semantics　to　an　open　knowledge　source.　We　have　found　a　suitable　tool　for　this　purpose.　That　is　the　co-algebra.　We　also　try　to　give　a　preliminary　delineation　of　a　co-algebraic　semantics　for　a　typical　example　of　open　knowledge　source　-　the　knowledge　distributed　on　the　World　Wide　Web.　©　Springer-Verlag　Berlin　Heidelberg　2006.