Aim/purpose - Despite increasing importance of fostering innovation among employees, and the growing interest in Positive Organizational Behaviour (POB) constructs, little empirical research has been conducted on the topic of innovation with POB. Moreover, though research proved significant relationship between positive psychological capital (PsyCap) and creative performance, no studies examined PsyCap with innovative behavior. Thus, the purpose of this paper is to examine the link between positive psychological capital and innovative behavior as well as the link between innovative behavior and job satisfaction as well as engagement. Design/methodology/approach - Using regression analyses, data were obtained from Egyptian professionals (N = 250). The survey included measures of psychological capital and innovative behavior as well as job satisfaction and engagement. Findings - Regression analyses reveal that PsyCap, with its four components of hope, optimism, resilience and efficacy, predict innovative behavior, which in turn affects satisfaction and engagement. Research implications/limitations - Limitations, contributions and recommendations for future research are noted. Results contribute to a better understanding of how psychological capital enhances Innovative behavior in the workplace, which in turns, enhances job satisfaction and engagement. Originality/value/contribution - The study is the first to examine the relationship between psychological capital and innovative behavior.(original abstract)