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In innovation studies a fundamental distinction lies between incremental and radical innovation. However, our understanding of radical innovation faces limitations in two respects. Firstly, research generally has concentrated on technological innovation by firms diffusing through markets. Secondly, current theorizing lacks a clear definition of radical innovation, with terms like “radical,” “breakthrough”, and “disruptive” often being used interchangeably. To address these shortcomings, we propose a broader approach to radical innovation based on an institutional-theoretical perspective. In particular, we start from the notion of the “categorical imperative”, penalizing innovations that don’t align with established categories individuals use to comprehend the world and establish expectations. This institutional approach facilitates the theoretical differentiation between innovations taking place within existing categories and those that redefine categories or establish new categories, thereby unifying concepts of incremental, breakthrough, disruptive, and radical innovation under a comprehensive theoretical framework. We argue that this approach offers a framework to distinguish and compare various innovation terminologies and theories. Furthermore, it allows for more comprehensive innovation theories, extending beyond biases towards technology, firms and markets.