Although studies suggest that transformational leaders play an important role in employee health and well-being, the relationship between transformational leadership and employee burnout remains unclear. One reason may be that moderators may play an important role. Building on conservation of resources theory, we examined if leaders’ perceptions of internal and external resources in terms of vigour and peer support augmented the relationship between transformational leadership and employee burnout in a sample of municipality workers and their leaders in Sweden (N = 217). Multilevel analyses over two time points revealed that both vigour and peer support enhance this relationship, such that when leaders experience high levels of vigour or peer support, the negative relationship between transformational leadership behaviours and employee burnout was strengthened. Our findings suggest that both personal and contextual resources may help leaders to better engage in transformational leadership, which is important in order to protect employees from burning out.