Daily transformational leadership behaviour encourages employee work engagement. Psychological contract fulfilment significantly enhances employees' and affect employees’ attitude, behavior, engagement and performance in general. The study sought to examine the significant role transformational leadership play in psychological contract and employee engagement. Using a quantitative cross-sectional study approach and a snowball sampling technique, a self-designed questionnaire was used to gather data from two hundred and forty-seven employees from the public sector of Ghana. Hypotheses were tested by means of structural equation modelling with maximum likelihood estimation using Stata 15 software. The findings reveal that Transformation leadership had a positive significant relationship toward psychological contract and also towards employee engagement. Transformational leadership had a positive significant relationship towards employee engagement and also, psychological contract positively mediates the relationship between transformational leadership and employee engagement The study contributes to clarifying and extending the social exchange theory and the job demand resource theory by unravelling how the transformational leaders motivate, encourage and reward employees in the reciprocal relationship between himself and their subordinates.