The trend of digitalization provides new opportunities for industrial equipment manufactures as sensor technology and ubiquitous connectivity become part of the equipment. In particular, cyber-physical systems (CPSs) enable digital innovation for the industrial product and service business by improving operational efficiencies, facilitating innovative hybrid business models, and fuelling servitization in manufacturing. Despite the new opportunities, so far no research has been conducted to investigate and classify configurations and affordances of this new technology. To gain both a broad and in-depth understanding of use scenarios and added-value of CPSs for the service business in the equipment industry, a multi-method approach is chosen: a systematic literature review as well as case study research are conducted. Grounded in existing literature and based on empirical data of 45 use scenarios, we propose a taxonomy to classify use scenarios enabled by CPSs in the equipment industry. This work contributes to the theoretical body of knowledge by proposing a taxonomy of use scenarios enabled by CPSs. The taxonomy can be (1) leveraged to categorize use scenarios of CPSs in the equipment manufacturing industry and (2) used as a framework for further research. Practitioners can use the taxonomy to classify and compare use scenarios as well as identify business model archetypes.