Purpose: The purpose of this study is to examine learning and employee-driven innovation (EDI) in the public sector, with a particular focus on the interplay between employee engagement and organisational conditions. Design/methodology/approach: The material consists of qualitative interviews with 23 participants from three municipal sites of innovation support that participated in a national programme aiming to strengthen municipalities' innovation work. Findings: The study found numerous constraining organisational conditions resulting in consequential loss of employee engagement for EDI. The conclusion drawn is that employee engagement and enabling organisational conditions are central to EDI in public sector workplaces, and that incorporating EDI into municipal daily operations requires paying attention to the interplay between organisational conditions and employee engagement. Originality/value: This paper provides important guidance for supporting EDI in the public sector. Implementing EDI into operations requires employee engagement to be successful. However, employees' engagement should not be overlooked or taken for granted. A practical implication of this study is that EDI in the workplace must be encouraged by creating a learning environment that supports innovative learning in the workplace. In practice, measures should be taken to support employee engagement by creating organisational conditions that provide a more expansive learning environment to ensure the continuity and perpetuation of EDI in public sector organisations.