The current European Union transport policy particularly focuses on public transport, along with multimodality and active mobility. It aims to contribute to EU Green House Gas reduction targets together with improvement of transport and mobility, in and around cities. The public transport importance makes the challenges that it faces even more central, underlining the critical role of research and innovation in that sector. Key identified challenges include among others: a growing importance of urban areas, an increase of urban population, digitalization and automation, need of transformation towards electrification and implementation of alternative fuels. The main aim of the paper is to present the extent to which these challenges are addressed by the recent research and innovation activities in Europe. The analysis uses the dataset of research and innovation European projects with a focus on public transport to point out their main achievements. First, we identified recent projects with public transport in their scope. The list contains 106 European projects, supplemented by 49 funded by member states. The quantitative analysis of identified projects aims to identify main topics and trends in public transport innovation research in Europe as well as main organizations involved these activities. Then, the in-depth analysis of projects scopes and their achievements enable to identify and describe progress within six main development areas, including electrification, digitalization, public transport management and planning, safety and security, transport automation and infrastructure. The conclusions present future research needs and policy recommendations.