A university library plays an important role in facilitating knowledge creation and a variety of learning activities. A library can be regarded as the heart of a university. If regular exercises are the key to maintain a person's health, then service design and innovation can be viewed as the regular exercises for the healthy development of a library. This paper aims to examine the services offered by university libraries in the digital technology era and to identify the service ecosystem and the necessity of value co-creation by using the system view and value co-creation concept in service science. Taking the service design and innovation initiatives in National Tsing Hua University library as a case study, this paper demonstrates the application of service design principle to innovating library services based on the Theory U and the service design methods based on the Double Diamond Model and Design Thinking. The process and outcomes shed light on the service innovation practices for university libraries.