This paper provides an in-depth case study of the ink-jet printing (IJP) technology that emerged from a mature industrial sector in the Castellon region (Spain) in the first decade of 2000. We propose an analytical framework that combines the theoretical perspectives of Industrial Districts and Innovation Systems, and exploit a qualitative methodology that includes information from patent and scientific article databases, technical literature and 21 interviews. Our results show that IJP is a major innovation that breaks with the tradition of machinery innovations in this industry in Spain. We provide micro-level evidence of the complex external and internal relationships in the innovation process. Internal ties, trust relations and strong in-house R&D were the determinants of the IJP innovation. In contrast to the literature, we find that secrecy and patenting play key roles in the sharing of knowledge and the innovation strategy.