We theorize that job autonomy leads to higher work engagement because it makes employees’ jobs more challenging. Results of a study of 267 employees supported our hypotheses that challenge demands (felt responsibility and cognitive demands) mediate the relationship between job autonomy and work engagement. We differentiated three dimensions of job autonomy (decision-making, scheduling, and method autonomy) and showed that work engagement is affected by decision-making and method autonomy, but not by scheduling autonomy. Moreover, mediating mechanisms varied depending on the type of autonomy. Decision-making autonomy led to work engagement through feelings of responsibility, whereas method autonomy led to work engagement through cognitive demands. Our study offers a new perspective on the challenging potential of job autonomy, thereby advancing our understanding of whether and why job autonomy is linked to work engagement. Implications for future research and professional practice on job autonomy are discussed.