This study examines urban innovation activities from the perspective of improving the efficiency of innovation chains and explored their operational patterns. The connotation of the urban innovation chain was analyzed following the process of the innovation chain and the characteristics of urban innovation activities. The urban innovation chain can be divided into the following three stages: original, technological, and innovation transformation. An indicator system for evaluating the three capacities of the urban innovation chain was established. Furthermore, the development level of strategic emerging industries was used as an indicator to measure the chain’s efficiency and analyze the relationship between these three constructed capacities in Chinese national innovative cities. Data published on the national innovative cities were used to measure the capacity of the urban innovation chain. The development of Strategic emerging industries indicates cities’ innovation performance, and an inductive approach was applied to analyze the relationship between the capacity construction of the urban innovation chain and innovation performance in innovative cities. This study found that the capacity of the urban innovation chain positively affected urban innovation performance and that the balanced development of the three capacities positively affected urban innovation performance. When urban innovation performance was at its highest, the contribution of original innovation capacity to innovation performance was significantly greater than that of the other two capacities; thus, an inverted U-curve illustrates the relationship between the improvement of urban innovation performance and the balance of the three capacities of the urban innovation chain. This study’s conclusions enrich the relevant theories of the innovation chain, provide a reference for the construction of the urban innovation chain, and promote the development of Strategic emerging industries.