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Social service organizations have changed dramatically during the last decade in an effort to increase effectiveness and control. This has placed new demands on those in leadership roles, and the need for knowledge of how to lead these transformed organizations has increased. Transformational leadership is a leadership model based on vision and empowerment, one suggested to increase both employee effectiveness and well-being, but the usefulness of this model in the public sector has been questioned. The general aim of this thesis is therefore to increase our understanding of the transformational leadership process in the context of social service organizations by investigating factors that explain when and why transformational leadership emerges and is effective. Questionnaire data from social service employees as well as interview data from managers were used in three empirical studies. Results from Studies 1 & 2 show that transformational leadership is positively associated with employee outcomes including commitment, role clarity, and well-being. Factors that might influence the effectiveness of transformational leadership were addressed in Study 1. It was found that leader continuity enhanced the effect of transformational leadership on role clarity and commitment, indicating that it takes time before transformational leaders actually have an effect on employees. Furthermore, co-worker support enhanced the effect on commitment, reflecting the role of followers in the transformational leadership process. The way in which transformational leaders influence employees was examined in Study 2, and climate for innovation mediated the relationship between transformational leadership and well-being both cross-sectionally and one year later. Finally, organizational factors that may hinder the emergence of transformational leadership were addressed in Study 3, and newly recruited managers were interviewed during their first year of leadership. Eight hindering factors in the organization to exhibit transformational leadership were identified, including the organizational structure, ongoing change, and the leaders’ working conditions. In all, this thesis has demonstrated the usefulness of transformational leadership in social services in terms of being associated with employee positive attitudes and well-being, and has also identified factors that may both help and hinder the transformational leadership process in this context.