This study aims to examine the role of entrepreneurial orientation (entrepreneurship orientation) in innovation level among Small and Medium Size Enterprises (SMEs). A questionnaire survey was conducted among 137 firms in the Podlaskie Region. Three hypotheses related to entrepreneurial orientation and innovativeness level were examined by Structural Equation Modeling (SEM). The relation between two constructs of entrepreneurial orientation and innovativeness, that is proactiveness and risk taking were analyzed. The research results show that proactiveness has a significant positive total effect on improving innovativeness. The findings suggest, in contrast to the strategic orientation literature, that risk taking deters enterprises from organizational innovation. The results confirmed the significantly higher impact of the risk taking as an intermediate variable on the innovation through the mediator of proactivity. This work examines the relations between entrepreneurial orientation and innovativeness, thus contributes to the strategic orientation literature.