The challenges of 21^st century business world characterized by stiff competition, technological growth and market dynamics require people-oriented leadership that fosters innovative work behaviors amongst employees for organizational sustainability. Therefore, as the employees’ innovative work behavior (IWB) has become the key for organizational sustainability, the present study examined the relationship between servant leadership and employees’ innovative work behavior via psychological empowerment. A well-crafted questionnaire was used to gather data from workers of both private and public organizations in Nigeria. The data were analyzed based on Baron and Kenny approach with the aid of Statistical Package for Social Sciences (SPSS). The results of Macro PROCESS analyses found that servant leadership was positively correlated with innovative work behavior. Also, psychological empowerment was positively correlated with innovative work behavior. Importantly, psychological empowerment moderated the relationship between servant leadership and innovative work behavior such that psychological empowerment amplified innovative work behavior when leaders were seen to demonstrate servant leadership in the organizations. It was therefore recommended that organizations should focus on creating organizational culture that supports servant leadership styles that foster innovative work behavior for effective organizational performance and sustainability.