PurposeThe purpose of this paper is twofold: first, to examine the relationships between participative leadership and employees’ work engagement and job satisfaction; and second, to determine whether the level of fun experienced at work moderates the effect of participative leadership on job satisfaction.Design/methodology/approachThe participants were 177 employees in a retailing store in Hong Kong. Hierarchical multiple regression was conducted with the control variables to ascertain the relationships among participative leadership, level of fun experienced at work, work engagement and job satisfaction.FindingsThe results indicated that participative leadership was positively related to employees’ work engagement and job satisfaction. Employees’ work engagement mediated the relationship between participative leadership and job satisfaction. This positive relationship between participative leadership and job satisfaction was stronger when employees had more fun at work.Research limitations/implicationsThe generalizability of the data was limited, as the characteristics of participants in a retail store are distinct from others in the service industry.Practical implicationsThis paper’s findings imply that participative leaders can engage in role modeling by providing more fun workplace activities to employees, which will increase their work engagement and job satisfaction.Originality/valueThe findings help to explain the relationship between participative leadership and job satisfaction, provide a better understanding of leadership management styles and show that participative leaders who engage employees in fun activities in the workplace can increase employees’ job satisfaction.