Abstract Evaluation taking place within publicly funded research institutions (PRIs) has been practiced as a useful instrument to justify PRIs’ public funding and to provide evidence for their internal decision-making. The role of evaluation in organizational governance is well-acknowledged as being important in PRIs’ management practices. However, it has not attracted much attention from research evaluation scholars. In this article, we propose that evaluation mechanisms perform a balancing role in organizational governance of PRIs with respect to three main aspects: strategy, funding, and operation, where governance tensions often occur between different stakeholders. This research attempts to contribute to a better understanding of why and how evaluation helps to deal with such governance tensions by looking at three case studies, namely the Max Planck Society (MPG), the Helmholtz Association (HGF), both in Germany, and the Chinese Academy of Sciences (CAS). We illustrate the circumstances and conditions in which evaluation mechanisms, where evaluation procedures and culture are institutionalized and stakeholders’ interactions are facilitated, help indeed to mitigate the governance tensions.