In this research we examine the relationship between IT capability and digital transformation as well as the influence of digital leadership. A theoretical framework was developed to explain the effect of digital leadership. Subsequently this was tested using a survey of 127 respondents from firms across Western Europe. Consistent with our proposed model, this study finds that both IT capability and e-leadership positively influence digital transformation. However, there is mediating effect of e-leadership on the relation between IT capabilities and digital transformation.