In this paper, we study the impact of leadership style among middle level managers of Iran Khodro, the biggest Iranian automaker, to promote innovation among regular workers. The proposed study designed a questionnaire and distributed it among middle level managers of this auto-maker. The study uses t-student test to examine the relationship between leadership behavior components and innovation and Freedman test is employed to rank the effects. The results of t-student values indicate that all leadership behavior of middle level have positive influence on innovation and Freedman test implied that stimulating knowledge diffusion was number one priority followed by intellectual stimulation and innovative role-modeling. We have also performed multi-regression analysis and the results have indicated that there were some positive relationship between leadership components and innovation.