Findings in recent research suggest that online journalism is much less innovative than many researchers and scholars predicted a decade ago. Research into online journalism has, however, been biased towards a focus on online news journalism, thereby neglecting the magnitude of new styles and genres that are currently emerging online. In this paper the findings of a longitudinal ethnographic case study of the development of a section for feature journalism in the Norwegian online newspaper dagbladet.no is presented. The study is framed by an understanding of innovation as a process where organizational structures and individual agency interact. The findings suggest that individual action has been downplayed in previous research as a determinant for processes of innovation in online newsrooms, and that a substantive grounded theory of innovation in online newspapers is comprised of five factors: newsroom autonomy, newsroom work culture, the role of management, the relevance of new technology and innovative individuals.