Colleges and universities play a crucial role in fostering innovation, making it essential to explore effective strategies for promoting innovation at the institutional policy level. This paper focuses on the establishment of intellectual property (IP) model cities as a starting point and conducts an empirical analysis using innovation data from 234 cities and 942 colleges and universities between 2007 and 2017. By constructing a multi-temporal double-difference model, this study reveals that the establishment of IP model cities effectively fosters innovation in colleges and universities. Further analysis demonstrates that this promotion effect is particularly significant in the western region, key cities, key colleges and universities, as well as in the fields of invention and utility model patents. These conclusions withstand a series of robustness tests, confirming their validity. In terms of the underlying mechanisms, it is found that the national IP pilot city policy has a substantial impact on university innovation by promoting research and development (R&D) investment and strengthening innovation cooperation. The insights provided by this study offer valuable policy recommendations for leveraging the innovation potential of the IP model city policy, thereby driving economic transformation, upgrading, and fostering innovation development in China.