Narratives have become increasingly prominent in both design and innovation management. As a fundamental aspect of human cognition and a mode of communication, the role of narrative in design and innovation processes has been emphasized. Human beings have been acknowledged as “homo narrans”, who, in and through stories, learn about, make sense of, and act in and on the world. They perceive, think, imagine and make ethical choices through narrative structures. Despite recent studies exploring the roles and characteristics of narratives and storytelling in design and innovation, there remains a gap in understanding how design narratives can influence innovation processes. This doctoral research aims to investigate the fundamental characteristics of design narratives in the design innovation process. By addressing the knowledge gap between design studies and innovation management studies, identified through both academic and practical reviews, this study seeks to establish a theoretical foundation for Design Narratives in innovation. Initially, the study constructs a conceptual framework to address the central issue. Through interdisciplinary conceptualization among design studies, innovation management, and narrative studies, following a contextual review, key premises and assumptions are woven together. Specifically, “Design Narratives as Worldmaking” can facilitate and coordinate the co-evolution of problem and solution spaces in the design innovation process. Subsequently, three dimensions of narratives—typologies, functions, and elements—are constructed to explore different aspects of narrative characteristics, which are fundamental facets argued in narratology. This research employs qualitative and exploratory research methods, grounded in a social constructivist worldview. Methodologically, it adopts a mixed method design, utilizing two qualitative methods: protocol analysis as the core component and a multiple-case study as a supplementary component. Following the initial research phase, which includes a contextual review, a systematic literature review, and expert interviews, the main research activity is defined as a mixed method design of the “QUAL+qual” model. The outcomes of this study have made significant contributions to both academia and practical applications in design community. It has generated valuable academic insights by enhancing our understanding of how design narratives impact the innovation process and by developing a conceptual framework based on existing theoretical and empirical knowledge. Moreover, this research promotes interdisciplinary collaboration and dialogue among various fields, including design studies, innovation management, and narrative studies. In terms of practical implications, this study offers actionable guidance for companies, innovation practitioners, and design professionals aiming to utilize design as a catalyst for innovation. It introduces a fresh perspective on design, framing it as a practice of worldmaking through narrative and discourse. Additionally, the findings shed new light on how design practitioners can effectively serve as agents of narrative worldmaking. Finally, this PhD research holds broader societal implications. Given the multitude of complex challenges facing the world, this study underscores the crucial role of design narratives in harnessing interdisciplinary expertise to address these challenges confidently. Particularly for wicked problems characterized by hyper-complexity and ambiguity, the theoretical framework of “Design Narrative Worldmaking (DNW)” emerges as vital practices for creating and implementing innovative solutions. By illuminating new dimensions of narrative in design, design has the potential to emerge as a central solution to a wide array of increasingly intricate and sophisticated problems.