The authors describe the University of Twente (UT) as an innovative and entrepreneurial university. In demonstration of this approach, they discuss the ways in which the University participates in the encouragement of individual and institutional entrepreneurial activity and disseminates expert knowledge on issues relating to entrepreneurship. Graduates as well as faculty can benefit from UT schemes for entrepreneurs, and the establishment of a Student Entrepreneurship Centre is underway. The paper concludes with two case studies of projects which have followed the progression from a research unit or activity at UT into a limited company. The authors argue that higher education institutions must adopt active policies to enable both students and staff to initiate entrepreneurial activities.