Agile software development methods have been marketed by their ability to fully expose the innovation capabilities of a software development team. In a current business world, where the new innovations are seen as keys for a firm to survive and growth, these development methods have been wel-comed and widely adapted. There, however, is a lack of understanding how these methods drive innovation. Therefore, in this study we analyse agile prin-ciples and practices against established innovation climate dimensions. The re-sults show that there is a clear link between practices and several classical inno-vation climate dimensions. However, a few dimensions are covered by the agile principles. The study concludes by proposing new avenues for further work in agile software development research.