Service organizations need to respond rapidly to both changes in the market and customer expectations. One way of accomplishing this is through service innovation enacted to achieve competitive advantage. This study applies a service-dominant logic (SDL) lens to describe how a service organization may achieve service innovation through value co-creation that is facilitated by agile distributed methods. Literature on value co-creation is somewhat limited; although a few studies have provided guidance on what is needed to achieve value co-creation, no study has yet presented how this might be achieved. Therefore, using a single-site case study in the context of a large service organization, this study examines how value is co-created and the role that agile distributed methods play in this process. This research seeks to contribute to practice by providing service organizations with recommendations for achieving value co-creation. It contributes to theory by advancing our understanding of value co-creation processes; moreover, by using the context of an SDL, it presents a framework that maps elements of service innovation to agile distributed practices.