In this article, the legal regulation of innovative activity of small and medium-sized enterprises is considered. In the current situation, it is necessary to create a scientifically based theoretical base and a stable mechanism for stimulating innovative processes in the domestic economy, to study it from a legal point of view. High indicators of the development of innovative entrepreneurship are directly related to the degree of integration of small and medium-sized enterprises in the innovative sphere. Foreign experience shows that small and medium-sized entrepreneurs will be more profitable due to the introduction of innovations in their activities. In addition, the legal regulation of innovative activity of our small and medium-sized enterprises has not yet been sufficiently developed, which does not allow the development of the innovative system of the country. In this regard, the most urgent task in the field of law is the development of a legal project of innovative entrepreneurship and the determination of ways of further legal development of innovative entrepreneurship. Our country should create projects that stimulate entrepreneurs to engage in small and medium-sized businesses, provide cheap loans, reduce taxes, allocate subsidies, and attract foreign investors. Having studied the legal regulation of small and medium-sized businesses in the Republic of Kazakhstan, the authors considered the legal status of small and medium-sized business entities engaged in innovative activities, defined the concept and legal essence of "innovative activity", analyzed the legal protection of small and medium-sized innovative businesses in Kazakhstan and foreign countries, determined conditions of interaction with infrastructure support for small and medium-sized businesses. As a result of the research, proposals were made to improve the legislation of Kazakhstan in this area.