We study the impact of analyst coverage on firm’s innovation. We disclose that analyst coverage plays an information effect on firms’innovation. As a whole, analyst coverage improves firms’innovation. Further study shows that analyst coverage also produces a pressure effect on firms’innovation. Specifically, as the number of the analysts, following the firm, increases, the positive effect of analyst coverage on firms’innovation decreases. For some certain firms, when the number of the following analysts surpasses the critical value, analyst coverage begins to play a negative effect on firms’innovation. The positive impact of analyst coverage on firms’higher quality innovation, is less than the positive impact on low quality innovation. The results show that the impact of analyst coverage on innovation can be comprehensively disclosed, only if both the information effect and the pressure effect of analyst coverage are considered.