Abstract: The research for the mechanism of how transformational leadership takes effect is popular at present. It is generally agreed that psychological empowerment mediates the relationship between transformational leadership and leadership effectiveness. As the main dimensions of psychological empowerment, meaningfulness and self-efficacy significantly mediate the relationship. It is also reported that trust and organizational justice significantly mediate the relationship between transformational leadership and employee performance. In addition, leader-member exchange and job characteristics play the mediating role between transformational leadership and subordinate behavior. In the future, goal setting will be explored as a different way for explaining the effects of transformational leaders

Key words: transformational leadership, mediating variable, leadership effectiveness