Based on the perspective of R&D output efficiency， the paper investigates the role of internal control in Chinese corporate innovation by adopting the internal control index of mainboard listed companies in Shanghai and Shenzhen from 2012 to 2015. The study finds that there is a significant positive correlation between internal control and innovation efficiency， the result supports the hypothesis that “internal control promotes corporate innovation”. Further research finds that internal control affects company’s innovation by mitigating agency conflicts， mitigating information asymmetry and reducing innovation risk paths； internal control has a stronger positive influence on corporate innovation where the level of marketization is low and the legal environment is poor， internal control has a complementary or alternative role to the institutional environment. The unfavorable impact of incomplete institutional environment on corporate innovation can be remedied by strengthening internal control. The research in this article provides empirical evidence for the enforcement of internal control laws and regulations in China， and shows that the internal control laws and regulations implemented in China reflect the timeliness and necessity.