Abstract. The study highlights internal marketing as a key/central concept in pursuit of achieving organizational loyalty among employees. This paper identifies the relationship between internal marketing and employee loyalty with mediating role of job satisfaction. Data was collected through survey-based questionnaires from 386 employees working in the hospitality industry of Pakistan. Amos 22 was used for CFA and SPSS 22 for correlational and regression analysis. Results revealed that internal marketing boosts employee loyalty, and additionally job satisfaction provides effective underlying mechanism for the relationship between internal marketing and employee loyalty. Thus, effective implementation of internal marketing helps to inspire and motivate employees creating a long run sustainable competitive advantage.