Job crafting (JC) is of crucial importance for organizations and individuals. It brings about several positive employee-related results (e.g., increased engagement) as well as positive customer-related results (such as solving customer problems). Despite the recognition of JC importance, there is very limited research in the hospitality field that investigated employee JC and the factors affecting it, such as transformational leadership (TFL). Therefore, the study aimed at identifying the extent to which the hotels apply TFL; investigating the degree to which hotel employees craft their jobs; examining how TFL impacts JC dimensions and investigating the effect of psychological capital (PsyCap) as a mediating variable on the relationship between TFL and JC. For the attainment of these objectives, data were gathered via questionnaires. A convenience sample of 750 hotel employees from 15 five-star hotels in Cairo was chosen for investigation. Only 400 valid questionnaire forms were received from the employees. Descriptive analysis, correlation analysis, Mann-Whitney and Kruskal-Wallis tests, as well as multiple regression analysis, were used. The findings indicated that TFL positively influenced each of the four facets of JC partially by enhancing PsyCap. All demographic and employment characteristics (i.e. gender; age; educational level; department; tenure) were found to positively affect JC. Thus, it is suggested that hotel management should continue with the good practice of TFL as it positively influences the employees' JC. Additionally, hotels should help employees improve all dimensions of PsyCap, especially resilience and optimism and increase crucial positive factors that contribute to enhancing employees' PsyCap.