As a major force of “patient capital”, government-guided funds fulfill the mission of strategic leadership and forward-looking deployment. Based on the patent data from A-share listed companies in Shanghai and Shenzhen from 2011 to 2022, this paper examines the impact of government-guided funds on the expansion of corporate innovation boundaries and its transmission mechanisms. The results show that government-guided funds significantly promote the expansion of corporate innovation boundaries through two channels: signal transmission and innovation collaboration driving. This effect remains robust after various robustness tests. Heterogeneity analysis reveals that the promoting effect of government-guided funds on the expansion of corporate innovation boundaries is more pronounced in high-tech industries and regions with mature venture capital ecosystems. Further extended analysis indicates that government-guided funds can effectively stimulate the expansion of corporate innovation boundaries in upstream suppliers through industrial chain transmission mechanisms. It also demonstrates that the expansion of corporate innovation boundaries significantly enhances corporate market share and sustainable innovation capacity. This paper verifies that government-guided funds can leverage the synergistic advantages of “a proactive government” and “an effective market”, holding substantial practical value for achieving innovation-driven transformation and technological self-reliance and self-improvement.