Functionality is one of the key concepts in understanding an artifact and in engineering domain knowledge. Although the importance of sharing of engineering knowledge in industry has been widely recognized, from our experience with collaborative research with a production company, industrial engineers have had difficulty in sharing engineering knowledge including functionality. To promote the sharing of the engineering knowledge from the viewpoint of functionality, we have established an ontology-based knowledge modeling methodology for functional knowledge, which has been successfully deployed in a production company. It consists of two ontologies to capture functionality and the specifications for modeling processes. This paper summarizes these ontologies and its deployment, and discusses the modeling process based on the ontologies, which includes detailed modeling steps, types of functional knowledge, and ontological guidelines.