In recent years, cities and city governance have been comprehensively urged to innovate to address complex societal challenges. An epistemic community–including the UN, OECD, global philanthropies, consultancies and think-tanks–has provided influential support by globally circulating examples of pathways to urban governance innovation (UGI) and codified best-practice innovation techniques. In this paper, we address how these pathways and codifications of UGI gel with actual practices of institutional change. We present a grounded theorization of UGI to enhance empirical understandings of its practice, framed through a novel combination of conceptual resources drawn from recent relational theorizations of governance innovation from scholarship on urban sustainability transitions and new municipalism. Drawing on analysis of a suite of urban-based innovation units internationally, we propose three key dimensions to a more nuanced understanding of UGI; namely that UGI is a process enacted relationally, and through navigations that are inevitably situated. We conclude by stressing the importance of understanding how UGI proceeds through more uncertain, piecemeal and incremental routes than globally-circulating pathways infer. Second, we argue that understanding the relational, navigational and situated dynamics of UGI is critical to evaluating its agendas, ambitions and (ambiguous) political possibilities.