The development of effective innovations in businesses is recognized as a fundamental challenge due to the high level of uncertainty and complexities involved. Rapid technological advancements and the necessity for innovation have led to widespread changes in businesses globally. Agricultural businesses, especially in production, processing, packaging, distribution, and marketing sectors, connect various components of the value chain. Within this context, the saffron industry, with its unique characteristics, plays a crucial role in this process. Several factors influence the success or failure of saffron industry businesses, and among these, innovation is seen as the main pillar of economic and strategic development for enhancing saffron industry businesses. This study examines the role of innovation in the development of saffron processing and transformation businesses in Khorasan Razavi province. The study's population consists of saffron processing companies in Khorasan Razavi, with a sample of 120 companies selected using stratified random sampling, analyzed in 2024. The results of structural equation modeling showed that technological innovation positively impacts product, process, and market innovation. Additionally, the positive effect of research and development innovation on product, process, organizational, and market innovation was confirmed. Ultimately, it was concluded that product and process innovation have a positive effect on the development of saffron processing and transformation businesses. Accordingly, it is suggested that companies produce innovative products with high added value by utilizing localized technologies such as solar dryers and developing research collaborations with regional universities. Also, strengthening smart packaging and digital marketing infrastructure can pave the way for sustainable and export-oriented development of these businesses.