This paper studies urban innovation activities from the perspective of improving the efficiency of innovation chains and explores the operation patterns of urban innovation chains. The connotation of the urban innovation chain is analyzed according to the process of the innovation chain and the characteristics of urban innovation activities. The urban innovation chain can be divided into three stages (original innovation, technological innovation, and innovation transformation) and establishes an indicator system for evaluating the three capacities of the urban innovation chain using the development level of strategic emerging industries as an indicator to measure the efficiency of the urban innovation chain and analysing the relationship between these three constructed capacities in Chinese national innovative cities. Published data on China’s national innovative cities are used to measure the capacity of the urban innovation chain. The development of strategic emerging industries measures cities’ innovation performance, and an inductive approach is applied to analyze the relationship between the capacity construction of the urban innovation chain and innovation performance in innovative cities. This study found that the capacity of the urban innovation chain positively affected urban innovation performance and that the balanced development of the three capacities of the urban innovation chain positively affected urban innovation performance; when urban innovation performance was at its highest, the contribution of original innovation capacity to innovation performance was significantly greater than that of the other two capacities; an inverted U curve illustrated the relationship between the improvement of urban innovation performance and the balance of the three capacities of the urban innovation chain. The research conclusions of this paper enrich the relevant theories of innovation chain, provide reference for the construction of the UIC, and promote the development of strategic emerging industries.