The purpose of the study was to examine the relationship between psychological empowerment and organizational identification as well as the impact that these two constructs have on turnover intention and job satisfaction (focal outcomes). Participants were 5,195 employees from 730 teams in 6 Italian local health organizations. Two competing conceptual models were tested for goodness of fit using multilevel path analysis. In the first model, psychological empowerment predicts organizational identification, which, in turn, predicts focal outcomes. In the second model, organizational identification predicts psychological empowerment, which, in turn, predicts focal outcomes. Fit indices of the path analysis indicated that the second model obtained the best fit to the data as compared with other models. Moreover, mediation analysis showed that psychological empowerment mediated the relationship between organizational identification and focal outcomes.