The aim of the article is to substantiate theoretically the features of the environment, which empowers employee entrepreneurship. In the first part of the article, the concept of empowerment is analysed. The second part of the article is devoted to the analysis of the concept of entrepreneurship. Third part is main part in which the features of the environment that empowers employees’ entrepreneurship are highlighted. According to many authors, empowerment appears to reinforce a range of requisites for effective employee functioning, including autonomy (freedom to do the work), knowledge (tools to do the work), importance (a sense of personal impact) and feedback (information about how people are doing) (Dee, Henkin, Duemer, 2003). There are two forms of exerting power: “power-with” and “power-over”. From the perspective of employee entrepreneurship empowerment the “power-with” is emphasized. Many authors suggest two frames of empowerment: a structural/managerial frame and a psychological/cognitive frame. A structural perspective, according to Dee, Henkin, Duemer (25003), focuses on the sharing or transfer of power from higher to lower organizational echelons. Structural empowerment may be viewed as the process by which a leader or manager shares his or her power with subordinates. Power, in this context, is viewed as the possession of formal authority or control over organizational resources. The psychological approach focuses on intrinsic motivation rather than on managerial practices used to increase individuals’ levels of power. Empowerment is conceptualized, here, as a mind-set that employees have about their organization, rather than as something that management does to employees. It is argued, within this framework, that empowerment involves “a subjective state of mind where an employee perceives that he or she is exercising efficacious control over meaningful work”. Empowerment, in this instance, depends on the creation of conditions appropriate for “heightening motivation for task accomplishment through the development of a strong sense of personal efficacy”. When talking about empowering environment it is important to mention that the psychological cognitions of employee empowerment include meaningfulness, competence, choice, and impact. The analysis of the concept of entrepreneurship and its synthesis with the concept of empowerment allowed distinguishing following features of the environment that empowers employees’ entrepreneurship: 1) organizational culture should emphasize following values: creativity, initiative, proactivity, need to take a risk, inner locus of control, leadership, self-confidence, self-motivation, teamwork competences; 2) in order to increase employees’ motivation and belief in their own capabilities manager should employ transformational leadership style; 3) the compensation system of organization should foster employees’ entrepreneurship by rewarding them for demonstrated creativity, initiative, proactivity, innovativeness, team working; 4) organisational climate fosters entrepreneurship because mistakes are tolerated, there is no fear to make a mistake, parity in relationship dominate, employees receive constructive feedback, they are provided with autonomy and responsibility; 5) competence conditions that increase self-confidence and self-motivation should be created.