The United Nations Sustainable Development Goals, particularly SDG 5, seek to attain gender equality and empower all women and girls. While rural women face multiple challenges, the innovative and entrepreneurial leadership of women in farming and rural areas can foster resilient and sustainable rural communities. Although studies on women and innovation are increasing, a clear definition of women-led innovation is missing. One objective of this paper is to outline what makes women-led innovations a distinct kind of innovation, and why that should matter for policy. Drawing on the conceptual framework devised for the EU Funded Horizon Europe FLIARA (Female-Led Innovation in Agriculture and Rural Areas) project, we propose a context to understand women-led innovation on farms and in rural areas within the geographical scope of the European Union, while also identifying a set of distinguishing features that make women-led innovation categorically different from other types of innovations. Furthermore, another key objective is to show how a better understanding of the distinctiveness of women-led innovations can contribute to policy by using the European Commission Long-term Vision for Rural Areas as an example. We conclude by advocating for an increased focus on women-led innovations in policymaking for a number of compelling reasons. Firstly, women have significant potential to drive progress in rural development, sustainability, and equality. They have a unique perspective and approach which can offer transformative solutions to the challenges facing rural communities. Moreover, supporting women-led innovations serves as a catalyst for revitalising rural areas in an evolving rural landscape. Additionally, prioritising equal opportunities for all individuals and genders in rural areas is not only an issue of common sense, but is a moral imperative. By making sure women have the same access to education, resources, and opportunities as their male counterparts, we endorse basic principles of fairness and justice.