As the service industry is advancing, the meaning of service innovation has been evolved. Recently, service innovation embraces all creative activities about service offering or relevant to service offerings and emphasizes the importance of customers in innovation process as a key driver. The innovation in services is often the result from a collaborative process between KIBS firms and client firms. Many researchers have pointed out about how the KIBS firms drive the innovation through service. In spite of the importance of service innovation, previous studies did not address the questions about what kinds of factors affect service innovation in KIBS firms still remain, or what are the effects of different knowledge on the innovation process. Therefore, the purpose of this study is to investigate the effect of the interactivity that KIBS firms have with their customers on various types of innovations in KIBS firms. Interactivity has been touted to be the most important starting point for and the basis of service innovations. This study also examines the effect of knowledge types (tacit or explicit) on the relationship between interactivity and service innovation. To test the proposed hypotheses, we developed measurement items and distributed survey questionnaires to domestic companies. 230 survey questionnaires were distributed and 81 were returned among which 76 were usable. The results of this study show that interactivity may be a significant indicator of innovation within KIBS firms. It also represents that the effect of knowledge types on the relationship between interactivity and innovation. These results indicate that KIBS firms need to improve the various activities of interaction with customers for innovation. This study provides a blueprint to further investigation of the critical role of service in service science perspectives.