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Abstract Though transactional leadership is considered as a necessary precondition for transformational leadership to be effective, less attention has been paid to the role of transactional leadership in project success. Using 224 development projects of the Non-Governmental Organization (NGO) sector in Ethiopia, the present study examines the relationship between transactional leadership and project success and the moderating role of project goal clarity. The findings of the study indicate that contingent reward in transactional leadership is positively related to project success. Further, project goal clarity moderates the relationship between contingent reward and project success such that contingent reward becomes a stronger predictor for projects that have high goal clarity than low goal clarity. Implications of the findings, limitations of the study and directions for future research are discussed.