Abstract:The innovation policy of the European Union is based on the concept of smart specialization of regions, which means that regions should focus on their comparative strengths. With respect to this policy on transport innovations there is an interest to gain insights in the comparative innovation performances and capacities of regions in the transport sector. Innovation performances and capacities are, however, complex concepts. This paper elaborates an approach to measure and explain the innovation performance of the transport sector at regional level. The approach is based on structural equation modelling and applied to 251 European regions. The results show that high performing regions are predominantly found in Germany and Sweden, while low performing regions are located in Finland, Poland, Romania, Bulgaria, Hungary, Spain and United Kingdom. However, the scores of regions on innovation performance are rather different when the performance is measured for the transport manufacturing and transport service sector individually. Among the factors that may explain transport innovation performance of regions funding possibilities appear to be important, while the relevance of innovation milieu is limited.