Knowledge-based systems utilize expert knowledge to solve problems normally requiring human intelligence. They are often applied in process control when it is difficult or impossible to use classical model-based approaches. Networks of smart sensors and actuators are the most recent trend in automatic control. In this approach, low cost embedded controllers are placed in the same package with sensors and actuators and connected by a network, so a central computer is not needed to execute the control algorithm. Decomposition of the control algorithm into distributed smart devices is one of the key problems. The paper demonstrates how the control algorithm can be represented by a rule-oriented knowledge base and how the knowledge base can be decomposed and implemented on a network of smart sensors.