This study aims to explain the relationship between transactional leadership and the relationship of transformational leadership with organizational innovation through organizational learning capability as a mediator. This research was conducted at UKM (Small and Medium Enterprises) in the City of Kendari, Southeast Sulawesi. A purposive sampling technique was applied in this study with the distribution of 280 questionnaires. The findings in this study are that both transactional leadership and transformational leadership have a positive and significant effect directly on organizational learning capability and organizational innovation. The mediating role of organizational learning capability has a positive and significant influence in mediating both transactional and transformational leadership towards organizational innovation. The results revealed that organizational learning capability has a very large direct effect on organizational innovation, business organizations are expected to maximize their learning processes to create innovations to maintain and develop the existence of the organization in the future.