Abstract: Background and Objective: Transformational leadership and employee engagement have been much studied in the private industry but very little has been done in the public sector. This study was conducted in the Malaysian public sector to discover its impact on employee performance. This study aimed to develop a conceptual model and to examine employee engagement as a mediator between transformational leadership and employee performance in the public sector of a developing country. Materials and Methods: The data were collected through a survey of 200 employees in a public sector organization in Malaysia. Self-administered questionnaire was used for data collection. The sample size was determined according to the sample size at the level of confidence of 95% and significant level of 0.05. Stratified random sampling technique was used to achieve the objectives of this research. The survey instruments used in this study consisted of 34 items relating to 3 constructs namely employee engagement (EE, 11 items), employee performance (EP, 13 items) and transformational leadership (TR, 10 items). Results: Results of the partial least square structural equation modeling (PLS-SEM) revealed that transformational leadership was positively related to employee performance. In addition, the analysis also showed that employee engagement fully mediates the relationship between transformational leadership and employee performance. Conclusion: This study suggested that policy makers should introduce organizational interventions that encapsulate both transformational leadership and employee engagement to enhance employee performance in the public sector.