Purpose – This study aims to explore the relationship between transformational leadership and employees’ innovative work behaviour (IWB), additionally examining the mediating effect of psychological empowerment. Design/methodology/approach – The study is based on a cross-sectional design, data being collected from 139 employees through the following structured questionnaires: Multifactor Leadership Questionnaire, IWB and psychological empowerment instrument. Findings – The findings revealed a positive and significant relationship between transformational leadership and both IWB and psychological empowerment, as well as the fact that transformational leadership, through psychological empowerment, fosters IWB. Research limitations/implications – One of the main weaknesses of this study is the use of a crosssectional design, which does not allow for an assessment of the cause–effect relation. Also, using a selfreported questionnaire might have brought common method bias. Practical implications – The paper shows that, by creating a greater sense of empowerment, leaders could have a higher positive effect on employee’s levels of IWB. Moreover, empowerment acts as one of the most important and effective processes within the transformational leadership framework in fostering innovation among followers. Originality/value – This study extends the empirical research on transformational leadership and its influence on employees’ work attitudes. Given the scant research on the role of the psychological empowerment, the results of this study confirm not only its mediating role but also the need for further studies in this direction.