The hospitality industry has undergone major changes over the last few years (Hartley - Leonard, 1993). A dynamic, changing environment may require a change-oriented, or transformational style of leadership (Tichy and Devanna, The Transformational Leader 1985). The purpose of this study was to test a process model of transformational leadership. Prior research in this area has examined relationships between transformational leadership and a limited set of dependent variables. Moreover, there has been little research on the process by which transformational leadership influences relevant outcome variables. The results showed that transformational leadership has a direct impact on perceptions of subordinate satisfaction with the leader and leader effectiveness, as well as an indirect effect on these variables through its impact on openness of communication, mission clarity, and role clarity.