Purpose: This paper investigates innovation in the Danish facilities management sector and addresses the following research question: “Do Danish FM organizations innovate and if so what are the major types of innovations in the Danish FM sector?” Background: In the last three decades, Facilities Management (FM) has established itself as a key service sector, with a diverse and highly competitive market of FM contractors, in-house FM teams, FM suppliers, FM consultants, and professional FM institutions. Traditionally, innovation processes in service firms have often been characterised as being unsystematic and not science-based and often resulting into ad-hoc innovations that were not really strategically planned. Recent literature, however, has showed that service firms also innovate and their innovations are also of strategic, organized nature. Approach (Theory/Methodology): The study takes the starting point in the literature on facilities management, services and service innovation, and adopts a qualitative research approach to investigate the research question. Specifically twelve interviews were conducted with key managers in twelve Danish companies in the Danish facilities management sector. Results: The results show that for big service providers, innovation is a strategic activity and is conducted as a planned and systematic process. For FM service customer with their own FM department, the results are mixed: some of the FM departments have innovation as a strategic priority and clear innovation strategies while other FM departments do innovate without being aware that innovation is taking place. The “ICT Supplier/Consultants” are found to be innovative and their innovations are both driven by the user needs and by the desire to improve their competitiveness. Practical Implications: The study has implications for service innovation researchers, facilities management researchers as well as facility managers.