The goal was to investigate the main factors of use and improvement of innovation structure in breeding farms with milk production. Presented the scientific interpretation of innovation concept, considered identification signs by which innovation is different from any new alteration or undertaking. Variants and types of existing and applied innovation were analyzed. In addition, it was proposed to highlight the selection innovations, which aimed to the modernization of production subject development – animals (cows, bulls, calves), and have fundamental importance for the success of most other innovation types. The structure of breeding innovation, including 11 elements and modern methods of improving dairy herds and animals, has been proposed. The experience of innovative development of breeding dairy cattle breeding in the Republic of Karelia and the use of livestock breeding, as a reliable carrier of innovation and competitiveness, have been considered. There was given the characteristic of created innovative product - Karelian type of Ayrshire breed with cow's productivity for the 1st lactation 7379 kg of milk with a total production of fat and protein kg 537.32, for 3rd - 8703 kg and 625.3 kg, respectively. For 10 years (2004-2014) milk yield of the whole Ayrshire population in Karelia increased from 4202 kg to 6779 kg of milk. Thus, the introduction of the innovation in Ayrshire cattle herds, the breeding a new type animal provide the growth of cow’s productivity, intensification of milk production and breeding production, modernizing and improving the efficiency of milk production and breeding production, modernization and increase of dairy farming efficiency. Thus, the introduction of the innovation in Ayrshire cattle herds, the breeding a new type animal provide the growth of cow’s productivity, the intensification of milk production and breeding production, the modernizing and the improving the efficiency of milk production and breeding production, the modernization and the increase of dairy farming efficiency.