Past research has highlighted the negative effects of abusive supervision on employees’ performance. This study seeks to investigate how immediate manager’s abusive behavior affects employee performance. Specifically, drawing upon social exchange theory, conservation of resources theory and LMX theory, this research develops a theoretical model that illustrates how abusive supervision negatively affects employees’ innovative behavior, through climate for innovation in an organization and LMX quality. For these relationships, we propose dyad tenure, gender dissimilarity, perceived organizational support, coworker support and locus of control as first stage moderators and psychological empowerment and psychological security as second stage moderators.To test the proposed model, data was collected from fulltime US employees who have regular interactions with their immediate manager. A two-time survey was distributed to participants through Prolific platform. The hypotheses that were tested include the negative relationship between abusive supervision and employee innovative behavior, the mediating role of Leader-Member exchange (LMX) quality and climate for innovation, and the direct effect of abusive supervision on the mediating variables and moderating effect of psychological security were supported. Possible implications, future research and practical contributions are discussed.