Under the basic economic system with public ownership as the mainstay, state-owned enterprises of China rely on their dominant economic status and strong innovative R&D resources, which should be the main force and vanguard of the country’s innovation-driven development, but there are many problems in the innovation behavior of state-owned enterprises at present, such as lack of motivation, inadequate investment, and inefficiency. For a long time, local government intervention is considered to be closely related to the slow pace of innovation and upgrading of state-owned enterprises. Therefore, local government behavior will inevitably have an impact on corporate innovation. Based on this, considering the institutional background of the transitional transition and the special ownership system arrangement in China, this paper mainly studies the influence of the local SOE dependence on innovation input, innovation output and the upgrading level of state-owned enterprises, and analyzes the regulation effect of mixed ownership as a factor of the ownership structure.　　On the basis of the theoretical analysis, this paper takes the data of state-owned listed companies in China as samples to do empirical research. The results show that: （1）The local SOE dependence has a significant negative effect on the innovation output and upgrading level of state-owned enterprises, but its influence on the innovation input of state-owned enterprises is not significant; （2）The mixed ownership system optimizes the internal governance structure of state-owned enterprises, and thus improves the negative effect of the local SOE dependence on the innovation output and upgrading level of state-owned enterprises; （3）In the further study on the regulation effect of external environmental factors, it is proved that the improvement of the degree of market competition in the industry and the level of regional marketization are conducive to curbing the negative impact of the local SOE dependence on the upgrading of state-owned enterprises.　　The main contributions of this paper are as follows: First, starting from the innovation and upgrading, this paper broadens the inherent research scope of corporate innovation behavior and reveals the different impacts of the local SOE dependence on state-owned enterprises’ innovation input, innovation output and upgrading level. Second, unlike the previous literature on local protection through comprehensive index, this paper discusses the impact of local SOE dependence on the innovation and upgrading of state-owned enterprises from the dual perspectives of market segmentation and administrative intervention. Third, based on the new measure of state-owned enterprise equity reform, namely, mixed ownership, this paper considers the regulation effect of the internal equity structure factors of enterprises, and verifies whether mixed ownership is conducive to alleviating the negative impact of the local SOE dependence on the innovation output and upgrading level of state-owned enterprises.