Innovation means improvement and need for people to change in making decisions. Innovation is important to the livestock industry to achieve the government?s aspirations by 2020 through the New Economic Model, Government Transformation Program and Economic Transformation Program. The innovation should be replicated to other farmers to enable industry to grow faster. The livestock industry has contributed more then RM 10 billion and some current innovations in livestock gathered from farmers, government initiatives, success stories are categorized into seven areas, namely innovation in business, organization, process, technology, marketing, product and strategy. Also highlighted are some of the challenges faced by the livestock industry which needs innovation & R&D to resolve. In conclusion innovation should cover all stakeholders to meet the challenges and to achieve the government?s aspirations.