: Further deepening the reform of mixed ownership of state-owned enterprises is an important measure to mobilize the vitality of the state-owned economy and amplify the role of state-owned capital, and is one of the trends of economic and social development in the new era. Taking small and medium-sized state-owned enterprises as the research object, this paper analyzes the influence of non-actual controller's governance participation in small and medium-sized state-owned enterprises on enterprise innovation. The results show that the possibility of innovation is higher when non-actual controller participates in governance; At the same time, the governance participation of non-actual controllers is positively correlated with enterprise innovation. The higher the governance participation of non-actual controllers, the better the enterprise innovation. Further research shows that the governance participation of different non-actual controllers has different impacts on enterprise innovation, and the more independent non-actual controllers participate in governance, the stronger the promotion role of enterprise innovation. In the future, in the process of mixed ownership reform of state-owned enterprises, it is necessary to introduce high-quality and innovative non-actual controllers, improve the voice of non-actual controllers, establish and improve policies and regulations, and give full play to the role of non-actual controllers in promoting enterprise innovation.