This study examined whether and why authentic leadership predicts followers' performance. We hypothesized that authentic leadership predicts followers' learning goal orientation (goal to develop and improve), which, in turn, predicts followers' in‐role and (civic virtue) extra‐role performance. A multilevel, multisource, time‐lagged study, conducted in telecommunications companies in Pakistan, among 115 supervisors and 345 reports supported indirect relations between authentic leadership and (1) follower in‐role and (2) extra‐role performance (civic virtue) mediated by followers' learning goal orientation. Practitioner points Authentic leadership is considered to promote employees' developmental focus through authenticity on the part of the leader (e.g., being aware of one's strengths and weaknesses). We discuss and analyse authentic leadership as an approach that involves managers' modelling of a learning goal orientation to followers. Direct supervisors' authentic leadership was found to predict employees' in‐role and extra‐role (civic virtue) performance because it may model a focus on learning goals in followers. Hence, important organizational outcomes can be improved through authentic leadership.