The main purpose of this research paper was to investigate the role of transformational leadership in boosting up and encouraging the followers’ to engage in the innovative behaviors through work engagement and knowledge sharing. The data was collected from a sample of 350 private sector bank employees in Islamabad. SPSS software was used for analysis. The result showed that transformational leadership and was positively related to innovative work behavior. The findings also showed the obvious and significant impact of transformational leadership on work engagement and its consequent positive effect on the innovative work behavior. Also the results supported the mediation of work engagement between transformational leadership and innovative work behavior. Furthermore knowledge sharing also moderates the relationship between transformational leadership and innovative work behavior .To encourage employees to participate in the innovative activities, the leaders should take initiative to keep them engaged and utilize their mental faculties by stimulating them and maintaining an environment of knowledge sharing in the organization. Supervisor:- Dr. Hassan Rasool