With the development of national strategies (such as Industrial 4.0 and Made in China 2025), how to build digital enterprises and cultivate innovation capabilities of enterprises has become a critical problem to Chinese manufacturing enterprises. However, the literature on the specific path of information technology (IT) capabilities to the innovation of enterprises is still lacking a body of relevant empirical research. In particular, it has not yet thought to explore the information technology capabilities, digital transformation, and then innovation performance of manufacturing enterprises. By performing a questionnaire investigation for 138 Chinese manufacturing enterprises, this study adopted both a fuzzy-set qualitative comparative analysis (fsQCA) and structural equation modeling (SEM) to explore the set relations of the conjunctions and conditions and the statistical associations by studying the relationships among information technology capabilities, digital transformation and innovation performance. The results show that the positive impacts of information technology capabilities on the process innovation performance and the digital transformation, as well as the positive impacts of digital transformation on both process innovation performance and product innovation performance. Specifically, digital transformation takes on a new function of partial mediation of IT capabilities and process innovation performance, and digital transformation functions as a complete mediator for IT capabilities and product innovation performance. The combinations of causal recipes related to innovation performance are provided by a fuzzy-set qualitative comparative analysis (fsQCA). Through the analyses of SEM and fsQCA, this research develops the formation mechanisms of both process innovation performance and product innovation performance, and provides guidance for both IT and innovation management of manufacturing enterprises in China.Sustainability 2019, 11, 5946 2 of 17 and automation in organizational operation by using digital techniques, like cloud computing, big data, and the social platforms (Bharadwaj et al., 2013).). Enterprises which have realized DT can rapidly achieve product innovation and process innovation and meet personalized and changeable demands of customers, thus forming sustainably developing competitiveness. For example, the Haier Group building itself, a digital enterprise by means of Teamcenter (a full-life cycle management platform of model-based enterprise (MBE)) improves efficiency for new product development and supports global design collaboration and the operation of its supply chain. Therefore, how to build digital enterprises and cultivate innovation capabilities of enterprises has become an urgent practical problem for traditional manufacturing enterprises as they take the road to Industry 4.0.The existing literature [6][7][8][9] generally considered that information technology or digital technology can promote firm innovation (The innovation performance in this research mainly refers t...