In light of the rapid changes characterizing the contemporary business environment, the need to adopt innovation as a strategic pillar to enhance institutional competitiveness has grown significantly, including in higher education institutions. This study aims to analyze the relationship between innovation and competitiveness at the University of Zawia by assessing the extent to which various forms of innovation (technological, administrative, academic, and research-based) are adopted, and their impact on improving academic performance, university rankings, and the quality of educational services. The study also seeks to identify the challenges hindering the effective implementation of innovation within the university and to provide practical recommendations to address them. The study adopts a descriptive-analytical methodology by distributing a questionnaire to a sample of faculty members and staff at the University of Zawia. The results revealed a widespread awareness of the importance of innovation, along with its evident application in several areas, particularly in the use of technology. The findings also showed a statistically significant positive relationship between the adoption of innovation and the enhancement of the university’s competitiveness. However, several challenges were identified, such as weak digital infrastructure, limited funding, and organizational resistance. The study concluded with several recommendations, most notably the need to institutionalize innovation within the university’s organizational structures, enhance digital transformation, regularly update curricula, and link scientific research to community needs—all of which contribute to achieving a sustainable competitive advantage for the University of Zawia................. Keywords: ...............Innovation, Competitiveness, the University of Zawia, Higher Education, Digital Transformation, Administrative Innovation, University Ranking, Innovation Environment, Academic Quality, Scientific Research.