This research was purposed to find out The Effect of Democratic Leadership Style on Employee Performance with Motivation as an Intervening Variable. The subjects in this study were the employees in Muhammadiyah University of Yogyakarta Employee. The object in this study at Muhammadiyah University Yogyakarta which located at JL. Brawijaya, Geblakan, Tamantirto, Kasihan, Bantul, Yogyakarta. The sampling technique used in this study was Simple Random Sampling Technique. There were 77 employees were sampled in this study. This study used Path Analysis. Based on the analysis that has been done, the results showed that Democratic Leadership Style had a positive and significant effect on Employee Performance. Democratic Leadership Style had a positive and significant effect on Motivation. Motivation had a positive and significant on the Employee Performance. The result Democratic Leadership Style had a indirect effect on Employee Performance through the Motivation.