In today’s dynamic and competitive business environment, innovation is no longer a luxury but a necessity for organizational survival and growth. This study explores how leadership practices foster innovation by empowering employees, with a specific focus on the mediating role of employee engagement. Drawing on transformational and empowering leadership theories, the research examines the mechanisms through which leaders influence employees’ intrinsic motivation, autonomy, and creativity. Employee engagement is positioned as a psychological bridge that connects empowering leadership behaviors to innovative work outcomes. The study adopts a mixed-methods approach involving survey data from mid-sized knowledge-intensive organizations and qualitative interviews with managers and team members. The findings reveal that empowering leadership significantly enhances innovation, and this relationship is strongly mediated by employee engagement dimensions such as vigor, dedication, and absorption. The research highlights the importance of fostering a culture of trust, recognition, and participative decision-making to unleash employees’ creative potential. Implications for leadership development, HR practices, and organizational innovation strategies are discussed