This paper explores the relationship between intramural R&D, R&D spillovers -mediated in both regional and sectoral spaces- and innovative activity in Italy, with a particular focus on the role of firms’ human capital. Despite the extensive literature on the impact of R&D spillovers upon productivity growth of Italian manufacturing firms, very little is known about how they stimulate their innovative activity. Thus, this paper seeks to fill this gap by exploring the influence that R&D spillovers from regions and sectors simultaneously have on Italian firms’ innovative activities. The paper draws on the 8th and 9th surveys “Indagine sulle Imprese Manifatturiere” by Mediocredito Centrale. We find that internal R&D expenditure increases firm’s probability of innovating by 36 percentage points. Sectoral R&D spillovers are not statistically significant. Regional R&D spillovers enter negatively in the innovation regression. This is quite surprising as it goes against the so-called cluster studies which have suggested that firms located in clusters are more likely to be innovative. The sign of regional R&D spillover, however, changes when considering the interaction between such R&D spillover and human capital. It becomes positive and statistically significant. This implies that firms cannot exploit regional R&D spillovers unless they have managed to reach a good level of human capital.