► This paper highlights the importance of distinguishing between two different effects of the obstacles that firms face in undertaking innovation activity. ► The first effect is related to increasing awareness of the difficulties involved in innovating, or the “disclosing” and “learning” content of direct experience, described here as the revealed effect of barriers. ► The second effect is related to the perception of the impediments to innovation by firms that otherwise would be keen to engage in this activity: described here as the deterring effect of barriers. ► We have shown that, in the cases of cost and market barriers, the relationship between assessment of the barriers and engagement in innovation activities is characterised by a non-linear relationship, indicating the presence of both deterring and revealed effects. ► That is, the assessment of barriers as important is higher at the extremes: when firms do not engage in innovation activity, and when firms are highly innovative. Innovating firms are likely to face several challenges and experience different types of barriers. In this paper we argue that it is necessary to distinguish between two kinds of barriers to innovation. The first corresponds to what we describe as revealed barriers and reflects the degree of difficulty of the innovation process and the learning experience consequent on the firm engaging in innovation activity. The second type of impediment, which we label deterring barriers, encompasses the obstacles that prevent firms from committing to innovation. We use data from the 4th UK Community Innovation Survey (CIS4) to investigate the relationship between firms’ engagement in innovation and their assessment of the barriers to innovation. We show that the relationship is curvilinear in the case of costs and market barriers. These results have important implications for innovation policy and innovation management.