This research explored how innovative practice in interior design contributes to a more effective, integrated, and holistic response to changing contemporary socio-cultural, geographical, demographic, and economic global challenges. It particularly focused on discussing the emergence and case of transformative entrepreneurship in interior design, which effectuates necessary transformative innovation. The exploration suggests and discusses transformative innovation in the interior design industry: what it is and what it could be. The lack of transformative innovation case examples in the examined interior design industry led us to the identification of two research insights around the positive aspects or transformative potential of interior design innovation and the need for interior designers’ closer cooperation with other domains. Both are important research areas with wide implications for interior design strategies and innovation contribution analyses. Innovation in the context of interior design presents an important asset in enhancing the added value of design services on offer. Interior design is a field where innovation is becoming increasingly important, as in the current context the competitive battle has shifted from selling a product to providing a service or a memorable experience instead. Creativity and innovative ideas can greatly improve the quality of an interior, from its functional and aesthetic qualities to its perceptive and emotional impacts. Innovation can take different forms in interior design and is currently in high demand: from more efficient and custom production methods that save costs and resources to the continual improvement of the experience that a certain space provides.