To help higher education instructors, academic support personnel, and institutional leadership better identify, encourage, incentivize, fund, support and assess pedagogical innovation, we describe herein a valid taxonomy capable of precisely characterizing the range of pedagogical innovations in higher education. The Taxonomy of Pedagogical Innovation in Higher Education probes the "Focus of Innovation," "Degree of Innovation," "Intended Outcomes," "Barriers to Adoption," "Risks of Adoption," and direct and indirect "Costs." Using two scenarios, we illustrate how to apply the taxonomy to a pedagogical innovation with different sets of contextual factors. We conclude by discussing how the taxonomy might help provide a shared vocabulary for and understanding of pedagogical innovation, align pedagogical innovation to priorities, inform investment strategy, characterize an institution's innovation culture, and help to guide efforts to assess the impact of pedagogical innovations.