A wide range of factors has been found to affect organizational innovation. Of these, top managers' leadership style has been identified as being one of the most, if not the most, important. Yet, few studies have empirically examined the link between this factor and innovation at the organizational level. This study builds on the extant literature to propose four hypotheses about how top managers' leadership styles directly and indirectly (via empowerment and organizational climate) affect their companies' innovation. A multisource approach is used to collect survey data from 32 Taiwanese companies in the electronics/telecommunications industry. The findings support a direct and positive link between a style of leadership that has been labeled as “transformational” and organizational innovation. They also indicate that transformational leadership has significant and positive relations with both empowerment and an innovation-supporting organizational climate. The former is found to have a significant but negative relation with organizational innovation, while the latter has a significant and positive relationship. The implications of the findings and possible directions for future research are discussed.