ENInnovation is the subject of many economic studies. The article relates to innovation of districts of Lithuania. Analyzing the innovative capacity of regions can determine the strengths and weaknesses of regional development. The future development of the region and its competitive position arc strongly conditioned by the innovation of its resources and entities located within its territory. The purpose of this article is to analyze the key factors of innovation potential of the districts and impact on building a competitive advantage not only at the local level but also internationally.