The main objective of this study was to examine the mediating effect of a sustainable competitive advantage on the relationship between corporate social responsibility (CSR) and organizational performance among Thai SMEs. A questionnaire survey was used to gather data from 336 small and medium-sized enterprises (SMEs) in Thailand. Investigation of the resulting data demonstrated that participating in CSR initiatives enhances the sustainable competitive advantage and organizational performance of Thai SMEs. Moreover, a sustainable competitive advantage was found to serve as a partial mediator between CSR and organizational performance. This research uses stakeholder theory and the resource-based view theory to explain the link between CSR and organizational success. A competitive advantage significantly influences both strategic management and organizational performance. CSR is a process of transforming a company’s sustainable initiatives into sustainable competitive advantages that impact the organization’s performance.