Service sector grows rapidly and gives a foremost contribution to the world economy. In Sri Lanka, the service sector contributes more than 55% to the Gross Domestic Production. Among such services, health care is pioneering and includes many businesses and a wide variety of organizations. Within the healthcare sector, this study focuses on the private sector hospitals where customer engagement is very high. However, the scholarly attention given to understanding customer engagement and its impact is very rare, particularly in the healthcare sector in Sri Lankan context. Therefore, this study aims to examine the impact of customer engagement on customer loyalty in private sector hospitals. Based on the positivism, a quantitative survey was carried out distributing more than 200 questionnaires among people who have visited private sector hospitals in Colombo district, chosen based on convenience sampling method. The rationale behind limiting the study to Colombo district is, many of the private sector hospitals are located in this district in Sri Lanka. The data were analyzed with descriptive statistics and regression. The study found a high level of customer engagement in private sector healthcare and has a strong positive impact on customer loyalty. As implications, the study suggests private sector healthcare to manage customer engagements providing positive experience in order to sustain a loyal customer base.