This study focuses on the relation between innovation and the international involvement of small and medium sized enterprises (SMEs), taking into account export as well as import activities of firms. The analysis is based on a sample of more than 1.800 Dutch SMEs using regression analysis. The results of this study suggest that innovative investments as well as several innovative realisations or practices have a positive impact on international involvement. Also, some evidence is found that international involvement may stimulate firms to investment in product innovations and in new distribution systems.