Employee engagement has become an emergent topic in recent years among consulting firms and in the popular business press. Many researchers have claimed that employee engagement predicts employee outcomes (e.g. job satisfaction, intentions to quit); closely linked to employees’ innovation; behavior organizational success; and financial performance (e.g. total shareholder return). However, as far as we know, the role of the leader in fostering work engagement has received limited research attention. Furthermore, most extant researches studied the effect of transformational leadership on employee engagement have been for developed economies and the role of transformational leadership and employee engagement in transitional economies such as Vietnam is still unclear. To fill the research gap above, we take advantage of Vietnam’s transitional status to indicate the significant role of psychological empowerment in the circumstance of mediating role between transformational leadership and employee engagement.