This Chapter focuses on the role of tertiary education institutions (TEIs) in research and innovation. A central reason for looking at the tertiary education system in an innovation context is that in all OECD countries governments finance not only education infrastructure costs, but also a large proportion of gross expenditure on research and development (R&D), which flows to universities and other TEIs. One rationale for this sizable funding is the direct and indirect support given by the tertiary education sector to the overall innovation effort. This Chapter will therefore analyse the role(s) of tertiary education from a research and innovation perspective. It reviews the empirical evidence and analyses the governance of tertiary education research. Finally, it concludes by outlining policy options for enhancing research and innovation for countries to consider.