A knitted component including a knit element and a gusseted tongue is incorporated into an upper of an article of footwear. The knit element defines a portion of an exterior surface of the upper and an opposite interior surface of the upper, with the interior surface defining a void for receiving a foot. The knit element and the gusseted tongue are formed together as a knitted component during a knitting process as a one-piece element. The gusseted tongue is formed of unitary knit construction with the knit element and is joined with the knit element in an instep area of the upper. The knitting process includes steps of forming portions of the knitted component, transferring portions of the knitted component to opposite needle beds, shifting needle beds along a lateral direction to cause portions to overlap, and joining the overlapped portions by knitting to form the gusseted tongue.