Many public sector organizations set up innovation laboratories in response to the pressure to tackle societal problems and the high expectations placed on them to innovate public services. Our understanding of the public sector innovation laboratories’ role in enhancing the innovation capacity of administrations is still limited. It is challenging to assess or compare the impact of innovation laboratories because of how they operate and what they do. This paper closes this research gap by offering a typology that organizes the diverse nature of innovation labs and makes it possible to compare various lab settings. The proposed typology gives possible relevant factors to increase the innovation capacity of public organizations. The findings are based on a literature review of primarily explorative papers and case studies, which made it possible to identify the relevant criteria. The proposed typology covers three dimensions: (1) value (intended innovation impact of the labs); (2) governance (role of government and financing model); and (3) network (stakeholders in the collaborative arrangements). Comparing European countries and regions with regards to the repartition of labs shows that Nordic and British countries tend to have broader scope than continental European countries. Points for practitioners Public sector innovation (PSI) labs can help to approach innovation collaboratively across organizational boundaries. It is, however, necessary in this context to find the setup that best addresses an organization's needs or strategic ambitions. The proposed typology is based on criteria relevant for designing PSI labs. Being able to distinguish the different labs helps practitioners to choose models that fit their purposes and learn from existing labs.