Organizational ‘innovation laboratories’, dedicated facilities for encouraging creative behaviours and supporting innovative projects, have received scant academic attention despite their increasing popularity with a range of different practitioners. This paper develops an initial theoretical explanation of the phenomenon, based upon notions of organizational learning and dynamic capabilities. This framework is then used as the basis for analysing the structure, infrastructure, benefits and dis-benefits of three UK-based laboratory facilities (mass service, government department, academic institution). Preliminary conclusions suggest that the ‘innovation laboratory’ can offer real benefits for organizations: reinforcing corporate commitment to innovation and creativity by providing a physical manifestation of dynamic capability and double-loop learning concepts. Although the physical design of the space is central to its functionality – emphasizing dislocation from day-to-day activity, eliminating hierarchy, encouraging participation – direct facilitation remains critical to successful operation. There are also dis-benefits associated with what can be substantial financial investments and there is some evidence that such facilities can have a relatively short useful lifespan. Given the limited nature of the empirical base, the paper concludes with some specific suggestions for further work.