National innovation system (NIS) is an essential, effective and dynamic factor for the development of the nation. Despite the enormous research activities on NIS, there have been certain issues still remaining in this domain specially, in developing countries. Several articles have been published to deal with the factors affecting NIS of Malaysia but the role of research collaboration between university and industry (UIRC) on NIS is totally unattended in mainstream literature. Thus, the objective of this study is to determine the influence of UIRC on the NIS of Malaysia. Additionally, this study aims to indicate the current innovation performance and to identify the existing constraints of NIS. For the purpose of system modeling, system thinking approach is used to conceptualize and analyze the effect of UIRC on NIS. The result of this research shows that constraints of UIRC in Malaysia negatively influence on the success of NIS.