An Innovative Ward Project was undertaken as part of the planning for redevelopment of the Princess Alexandra Hospital. Two inpatient units (one medical and one surgical) became pilot areas for developing, implementing and evaluating innovative approaches to service delivery. The project focused on the key areas related to structural environment, information technology and redesign of work practices. This paper provides an overview which includes the key elements utilised to foster innovation. The challenges of disseminating and adopting successful innovations beyond the Innovative Wards are discussed.