Innovation districts have gained attention as a fast-spreading urban economic development strategy, raising numerous questions. What are their distinguishing attributes? Are they a substantive policy innovation? Are they likely to succeed in fostering innovation and economic dynamism? We propose a definition of innovation districts based on their characteristic features. Given the ambiguity of the term in practice, this is crucial for understanding and analyzing the strategy. We then evaluate innovation districts by applying theories and current understandings of the spatial and economic development aspects of innovation, entrepreneurship, and human capital, illustrating with examples from Boston, Detroit, Saint Louis, and San Diego. We conclude that the combination of components that comprises innovation districts is both new and valuable. Innovation districts present a potential pathway for advancing regional economic development goals via the pathways of innovation and entrepreneurship. We stress the importance of rigorous empirical evaluation and research regarding a variety of practical and strategic concerns.