This study aims to investigate the effect of internal marketing on innovation in hotels. When the related literature was reviewed, the relationship between internal marketing and innovation were hypothesized. The study focused on internal marketing as an independent variable and innovation as a dependent variable. The study was based on the quantitative method. Data was collected using a questionnaire to test the hypothesis of the study. Data was collected from (392) managers, supervisors, and employees working in these hotels in the greater Cairo governorate. Results and hypotheses have been analyzed and tested through SPSS V.16.0 and the partial least squares (PLS.3). The results indicated that there is a significant effect of internal marketing on innovation. Furthermore, these results hold important implications theoretically and practically for hotels. The study also made a number of recommendations, including the importance of maintaining the level achieved by the adoption of internal marketing, and further improving the innovation of surveyed hotels.