Labour is often regarded as a homogeneous input in the literature on knowledge production and innovation. However, the diversity of employees may also have an impact on knowledge creation. For instance, immigrants may contribute to innovation through their unique ideas stemming from their diverse cultural backgrounds. Conversely, they may hinder innovation due to conflicting behaviour. Organizational behaviour (OB) theories have also identified decision-making and social categorization as two underlying processes that may influence the impact of diversity on innovation. Nevertheless, jury is still out on the impact of immigrant employees on innovation. In this study, we investigate the impact of employee diversity on product and process innovations using data from the Canadian Workplace and Employee Surveys (WES) between 1999 and 2005. Our mixed logit model estimation results support the positive influence of immigrants on innovation even after controlling for various employee and employer characteristics. The results hold up when we address potential endogeneities. Additionally, the results indicate that immigrants are more effective in promoting innovation in firms with more organizational capital and training programs. Among industries, manufacturing and service sectors appear to have benefited the most from immigrants' contributions to innovation.