Abstract: Digitalized Innovation Capabilities (DICs), as a core enabler of firms’ sustainable competitive advantage, have become a central concern in both innovation management research and practice. Although mainstream studies have increasingly explored related concepts, connotations, boundaries, and impacts of digital innovation, there remains a lack of clear definition, rigorous measurement, and reliable empirical evidence regarding DICs. This gap poses challenges to the systematic analysis of their antecedents and outcomes. Based on an extensive literature review, this study systematically reviews the theoretical foundations of DICs and defines it as a firm’s capabilities to empower its innovation processes through the development and application of digital technologies. DICs are conceptualized to include three sub-dimensions: Openness Digitalized Innovation Capabilities (O-DICs), Affordance Digitalized Innovation Capabilities (A-DICs), and Generativity Digitalized Innovation Capabilities (G-DICs). Furthermore, drawing on interviews and survey data, the study develops a DICs measurement scale using EFA and CFA, and examines the reliability and validity of the scale. The results further verify the distinct effects of different DICs dimensions on firms’ innovation performance.