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This article explores the links between agency, institutions, and innovation in navigating shifts and large-scale transformations toward global sustainability. Our central question is whether social and technical innovations can reverse the trends that are challenging critical thresholds and creating tipping points in the earth system, and if not, what conditions are necessary to escape the current lock-in. Large-scale transformations in information technology, nano- and biotechnology, and new energy systems have the potential to significantly improve our lives; but if, in framing them, our globalized society fails to consider the capacity of the biosphere, there is a risk that unsustainable development pathways may be reinforced. Current institutional arrangements, including the lack of incentives for the private sector to innovate for sustainability, and the lags inherent in the path dependent nature of innovation, contribute to lock-in, as does our incapacity to easily grasp the interactions implicit in complex problems, referred to here as the ingenuity gap. Nonetheless, promising social and technical innovations with potential to change unsustainable trajectories need to be nurtured and connected to broad institutional resources and responses. In parallel, institutional entrepreneurs can work to reduce the resilience of dominant institutional systems and position viable shadow alternatives and niche regimes.