The primary aim of this research is to explore innovation activities and ascertain the relationships between these activities and growth performance of SMEs in the Tanzanian manufacturing sector. The applied model has been derived from international studies of innovation. A survey of SMEs combined with in-depth case studies was made to study innovation practices of SMEs in the Tanzanian manufacturing sector. The results of this survey are used to compare the situation with findings of previous research. An increased level of applied change is associated with innovating SMEs, and a positive relationship between innovativeness in the SMEs with growth performance could be established. Based on the comparison of the results, recommendations are made for stimulating innovation.