This study tested newly advanced theoretical predications about mechanisms by which authentic leadership has its positive effects on players’ psychological resources and team engagement. Specifically, we tested a mediation model, in which positive climate is the key social mechanism by which authentic leaders influence followers’ psychological capital and team engagement. Moreover, we examined the role of leader–follower characteristics in authentic leadership dynamics, particularly the role of race and gender. Quantitative data were obtained from 119 student-athletes representing 15 NCAA Division I men’s and women’s basketball teams. Results indicate that positive team climate mediated the relationships between authentic leadership and players’ psychological capital and engagement, and this relationship was moderated by gender. Results are discussed relative to the effects of gendered leadership, and implications for coaches and authentic leadership theory are presented.