This study examined the influence of transformational leadership style on employees’ retention in nongovernmental organizations in Arusha Town District in Tanzania. The conceptual framework consisted of transformational leadership style as the independent variable and employees’ retention as the dependent variable of the study. Both qualitative and quantitative techniques were used, in the study that adopted survey research design to capture objective of the study. The findings indicated that the transformational leadership has positive influence on employee retention, since employees in these organizations were found to have control of their jobs and were satisfied with their jobs and that employees were much more willing to work the entire contract period. The study recommends that non-governmental organizations in Arusha Town District to adopt this leadership style and that other supplement rewards and incentive mechanisms should be established to attract suitable staff development and financial plans to retain qualified employees.