While it is known that ‘innovative suppliers’ can contribute to their customers’ innovation processes, and that internal capabilities are important, it is not well understood what these capabilities are. Based on a survey of Swedish manufacturing firms, the paper finds that ‘innovative suppliers’ tend to have more digital capabilities than other firms and that there is a positive relation between digital capabilities and innovation performance. The study furthers knowledge on the implications of increased industrial digitalisation on ‘innovative suppliers’ and contributes to a practical understanding of the capabilities needed for ‘innovative suppliers’.