Abstract: Service modularization is an emerging issue, which is not only a transition of modularization theory, but also a new expansion of service innovation research. Based on literature review, this paper separately analyzed the relationship between service modularization, strategic flexibility and innovation performance. And then constructed structural equation model, collected data and carried out empirical study. This paper proposed and proved the internal mechanism of service modularization and innovation performance. At the end, the research linked the conclusions with existing literature, proposed some practical suggestions and further research directions.