The regulatory literature has long been concerned with the challenges of technological innovation, yet it says relatively little about what we understand as “innovative” and how innovation “types” impact on regulation. This article unpacks the concept of “innovation” and analyses its significance for the development of regulatory strategy. It shows that innovation types – such as “incremental” and “radical” innovation – are not clear-cut, but involve differences of interpretation. This interpretive flexibility makes them powerful discursive resources in regulatory decision-making. Through a study of the EU’s regulation of nanotechnology, the article shows how arguments of “incremental” and “radical” innovation can be mobilised to very different effect. These different ways of conceptualising new technology affect decisions on: (i) the desirability of legislative reform; (ii) the evidence-base for regulation; and (iii) the use of the precautionary principle. The study also shows how the framing of technology as “incrementally” innovative can contribute to a strategy of “deliberate regulatory ignorance”. The article concludes by arguing that the incremental/radical distinction can be put to more positive use, so that regulatory choices take account of the different techno-scientific and socio-economic dimensions of innovation.