Knowledge-Augmented Generation (KAG) is transforming the way generative AI systems produce accurate and reliable responses by grounding outputs in verified external knowledge sources. By integrating structured databases, knowledge graphs, and real-time retrieval mechanisms, Knowledge-Augmented Generation significantly improves factual consistency and contextual understanding. This approach plays a critical role in AI hallucination mitigation, helping models reduce false or misleading information while delivering trustworthy, explainable, and high-quality outputs across enterprise and research applications.