Two major issues have dominated the science policy discourse in Germany in recent years: innovation and excellence. The chapter focuses on the Excellence Initiative, which was first launched in 2005 and has so far received more than EUR 5 billion in funding. Although the primary focus of the initiative was not on innovation, it was assumed from the outset that the funding programme could also significantly increase the innovative capacity of science. We therefore investigate the actual role played by innovation, that is, what goals and tasks universities use to focus their activities. This also raises the question of to what extent was the envisaged thematic and institutional diversity actually achieved. The chapter shows that the reform project to allow more sectoral permeability and to promote more flexibility and an expanded culture of recognition in order to strengthen the innovative capacity of the German science system is still in its infancy.