Drawing on leader−member exchange and crossover theory, this study examines how leaders’ work engagement can spread to followers, highlighting the role of leader−member exchange as an underlying explanatory process. Specifically, we investigate if leaders who are highly engaged in their work have better relationships with their followers, which in turn can explain elevated employee engagement. For this purpose, we surveyed 511 employees nested in 88 teams and their team leaders in a large service organization. Employees and supervisors provided data in this multi-source design. Furthermore, we asked the employees to report their annual performance assessment. We tested our model using multilevel path analyses in Mplus. As hypothesized, leaders’ work engagement enhanced leader−member exchange quality, which in turn boosted employee engagement (mediation model). Moreover, employee engagement was positively linked to performance and negatively linked to turnover intentions. As such, our multilevel field study connects the dots between work engagement research and the leadership literature. We identify leaders’ work engagement as a key to positive leader−follower relationships and a means for promoting employee engagement and performance. Promoting work engagement at the managerial level may be a fruitful starting point for fostering an organizational culture of engagement.