Urban areas are centers of financial and industrial activities and social life. Therefore, they are high consumers of resources and energy. Consequently, the relevance of sustainable urban transformation as a mean to counter climate change is increasing. However, because cities are complex and adaptive (eco)systems characterized by constant change, established innovation management approaches are not necessarily compatible with them. Therefore, this study aims to shed light on the underlying mechanisms, innovation barriers, and drivers of urban innovation development in urban ecosystems. It adopts the complex adaptive system perspective that allows an exploratory analysis of intricate stakeholder interactions, being a means to achieve urban transformation. Based on a qualitative content analysis of data obtained through 20 semi-structured interviews, the author shows that urban innovation implementation relies on the interaction between stakeholders in the urban district and from the near and distant urban environment. However, individual, organizational, and ecosystem innovation resistance in the urban district hinder innovation implementation, innovation drivers instead focus on the core of the urban ecosystem. In addition, based on a crisp-set qualitative comparative analysis using data from 33 German urban innovation projects, the author identifies and proffers combinations of specific innovation drivers that result in urban innovation implementation.