In this article, the authors discuss the role of action research in relation to the investigation and practical implementation of innovations in health care. The diffusion of innovations is an essential component of the modernization of health services worldwide. However, the literature shows that it is not an easy process to research. A paradox is noted that although action research has much to offer, it has had only a limited impact in the innovation field. Drawing on an example of a project in the United Kingdom, the authors discuss whether action research is a valuable method in the study of the diffusion of innovations. They analyze its strengths and limitations as a "whole systems approach" that combines researching with developing and diffusing innovations. They argue that it is best suited to the study of innovation diffusion where there is a need for high level of adaptation in each new setting.