Ambiguity management is crucial to create an innovation. Although the most of previous researches have argued that a manager has to reduce ambiguity in an early stage of the innovation process, the recent researches suggest that ambiguity also has positive impact on creating an innovation when the organization is tolerate for ambiguity. However, the organizational ambiguity tolerance is not well investigated. To address this gap, this paper examines nine innovation projects by the grounded theory method. The analysis reveals that (1) the ambiguity of a radical project is higher than that of an incremental project and is difficult to reduce; (2) ambiguity has both a dark side and a light side; and (3) an organization that addresses a radical project has to tolerate ambiguity. We also identified organizational tolerance for ambiguity as an organizational ability to reduce ambiguity’s dark side and enhance the light side. Moreover, it was suggested that an innovation unit and senior manager’s support enhance organizational tolerance for ambiguity.