The purpose of this research was to analyze the effect of transformational leadership and employee job performance in the Amhara National Regional State economy development sectors. Correlation and descriptive survey design were applied. Quantitative data was collected from 264 sample respondents through the application of stratified, purposive and simple random sampling techniques and out of these, all questionnaires were valid and the analysis was made for 264 respondents. Reliability and validity of the measurements were checked through the use of Cronbach’s alpha. Pearson correlation and linear regression analysis were applied. The researcher found that transformational leadership and its dimensions (idealized influence, inspirational motivation, intellectual stimulation and individualized consideration) have positive and significant correlation with employee performance. On the other hand, from the multi-dimensional regression analysis, it was found that transformational leadership and three of its dimensions (individual influence (attribute), intellectual stimulation and individual consideration) were significant predictor of job performance respectively while the remaining two dimensions of transformational leadership (idealized influence(behavior) and inspirational motivation) were not significant. Thus, the researcher concluded that transformational leadership has significant role on the job performance. Finally, the researcher suggested that further research is needed in other sectors through the involvement of other variables such as organizational citizenship behavior, organizational justice, employee commitment etc.