Purpose This study aims to explore mediational mechanisms and conditions by which empowering leadership leads to positive outcomes at the employee level. Using social identity theory (SIT) as a foundation, the authors present an integrated moderated mediation model to explain the interactive effects of empowering leadership and leaders' prototypicality on employees' work engagement through the mediation of organizational identification (OI). Design/methodology/approach The research model was tested using multilevel nested data obtained from 634 employees working in 133 departments (teams) in the service sector of Pakistan. Findings The results reveal that empowering leadership influences work engagement through the mediation of OI. However, leader prototypicality has emerged as an important moderating condition for these relationships because, at a lower level of leader prototypicality, the positive effect of empowering leadership may diminish. Practical implications The results of this study suggest that organizations should promote empowering leadership to increase their employees' OI and work engagement. Furthermore, it is suggested that leader prototypicality is important along with empowering leadership to inculcate positive behavior among employees. Originality/value This is the first study of its nature, which used SIT to explain the indirect effect of empowering leadership on employees' work engagement via OI. Furthermore, the bounding condition of leader prototypicality is also studied for the first time in the context of the indirect relationship between empowering leadership and employees' work engagement via OI. The authors note that the novel unique findings of this study have the potential to open additional further avenues of research in the field of empowering leadership.