A new trend of user involvement in open innovation processes has emerged. Concurring with this trend the Living Lab concept has been re-vitalized. This concept has attracted attention lately, but there exist no coherent view. In this paper we discuss and define the concept and propose five key components and five key principles for Living Labs based on experiences from over 30 development and research projects within two Living Labs, Botnia Living Lab and Halmstad Living Lab. The key components are: ICT & Infrastructure; Management; Partners & Users; Research; and Approach. The key principles are: Openness; Influence; Realism; Value; and Sustainability. Our proposed definition of a Living Lab is: A Living Lab is a user-centric innovation milieu built on every-day practice and research, with an approach that facilitates user influence in open and distributed innovation processes engaging all relevant partners in real-life contexts, aiming to create sustainable values.