Purpose – This paper identifies challenges the traditional Thai silk industry has faced during its internationalization, and the public and private responses employed to overcome challenges. Design/methodology/approach – In-depth interviews were conducted with major players along the Thai silk value chain to gain insights into the industry's transformation from a domestic, cottage industry into an international fashion producer. Findings – Thai silk has created a niche market for high-end, cultural products, thus successfully sidestepping direct competition from emerging low-cost producers. The main innovative strategies employed include introducing new products, upgrading quality, attracting new customers, and collaboration between actors all along the silk value chain. Originality/value – This study illustrates how a traditional industry can evolve and successfully adapt to changing consumer demands and competitive landscapes in a globalize economy.