Increasing recognition is being given to the role that employee psychological capital (PsyCap) plays in desired outcomes of today’s organizations. Very little is known, however, about how and when an individual has reaches and stabilizes at a given level of PsyCap. To address this gap, this study seeks to better understand the antecedents of individual-level PsyCap and whether it can be contagious. The purpose of this research is to see how the leader's PsyCap can transfer to the subordinate's PsyCap. According to the social contagion theory, this study will apply positive emotions as the mediator of the contagion process of leader's PsyCap and subordinate's PsyCap. In addition, the study considers the contexts of social contagion as the moderators, and examines the moderated mediation effect on such relationship. The contexts of social contagion theory include the quality of leader-member exchange, self-disclosure of the leader, and self-esteem of the followers. These findings have implications for helping leaders meet the challenges they face in both understanding and to help develop the PsyCap of their employees.