This article advances knowledge about the initiation of police innovation in the context of drugs policing. Drawing on the findings of a qualitative research project, it provides an original account of the emergence of police drug diversion schemes in England and Wales by analysing the complex interactions between individual, organisational and environmental determinants. The concept of institutional entrepreneurship is applied to examine the role of diversion entrepreneurs in the innovation process. These are the key police actors behind local schemes who had an interest in changing the institutional status quo. Diversion entrepreneurs wove together various forms of knowledge to frame problems and persuade stakeholders that diversion would address policing priorities and reduce demand by reducing reoffending and the resources needed to deal with people caught committing minor drug-related offences. Police budget cuts had created fertile ground for diversion as police organisations were leaning towards more proactive styles of policing which focus on prevention by addressing the underlying causes of crime. Making the case for diversion also required diversion entrepreneurs to highlight the shortcomings of existing practices and present diversion as a viable alternative to traditional enforcement interventions that seek to tackle drug problems through criminal sanctions. This involved interpretive struggles over the police role and managing perceptions of risk. It is argued that police scholars should pay closer attention to institutional entrepreneurship within police organisations to enhance understanding of processes of innovation and cultural change.