Continual reconfiguration is a critical process for successful business growth and survival. There has been a lack of studies on reconfiguration in interorganizational relationships (IORs), and literature has called for future studies that concentrate on how businesses can create the dynamic capability to reconfigure frequently and effectively. By addressing this gap in the literature, this paper intends to fill it. Drawing insight from dynamic capabilities theory, it discusses the process and mechanism of reconfiguration in IORs and how it leads to innovation. This paper examines the evolution and theoretical foundation of the (re)configuration approach. Also, the disciplines involved in the approach are demonstrated. Further, (re)configuration in IORs and how it leads to innovation is examined. It has been argued that IORs contribute to the organizations and network parties by fostering innovation under a unified trademark.