The relevance of the topic. Economic, technical and organizational factors play a key role in the innovative and functional development of the construction industry. These factors determine the industry's ability to adapt to changes, implement new technologies and processes, and effectively use available resources. Goal. To show the factors influencing the innovative and functional development of the construction industry of the Russian Federation. Methodology. Methods of logical and comparative analysis. Results and conclusions. In the context of modern challenges and restrictions related to international sanctions, the Russian construction industry should actively seek ways to increase innovation activity. This article examines the key factors and prerequisites that affect the innovative development of the construction industry, which can contribute to increasing the innovative activity of organizations in the construction industry. The scope of application. Enterprises of the construction industry.