This study aims to advance the understanding of direct and moderated effect of transformational leadership on organizational innovation. A new framework is proposed in this research to identify the moderating effect of organization support for idea generating, risk taking and decision-making on the relationship between transformational leadership and organizational innovation. A sample of 63 companies from top 100 Iranian companies participated in this research. The results of this study supported the expected positive relationship between transformational leadership and organizational innovation. Besides, two of the predicted moderating effects were supported in this research. The results suggest that transformational leaders might not only promote innovative activity within the organization but also ensure the market success of the innovations.