As an inevitable problem in the process of urban development, urban planning has become an important factor affecting the long-term and efficient development of cities. As the internal performance of the city"s competitiveness, innovation ability has increasingly become an important driver of the city"s development. Based on this background, firstly, this paper analyzes how city compactness and innovation ability function from the theoretical mechanism level.Then,this article constructs index system to measure city compactness.Meanwhile,this article measures city compactness in Jiangsu province by the extremum entropy method.At last,this article uses the bidirectional fixed effects to test the mechanism of ctiy compactness and innovation ability .The results show that the city compactness has a significant effect on the innovation ability, and the improvement of the city compactness can promote the increase of the innovation ability through the knowledge spillover effect and the increase of human capital and social capital. Therefore, compact urban planning is adopted to effectively improve the city"s compactness and promote the improvement of innovation capacity