Along with the globalization of knowledge innovation, creativity has become the core of modern enterprise to obtain sustainable competitive advantage motivation. The relationship between transformational leadership and creativity is an inevitable research topic in the organizational change context filled with competition and uncertainty. However, the current academic circles about the relationship remain major differences. Some scholars believed that transformational leadership on creativity has a promoting effect. Some scholars pointed out that transformational leadership on creativity exists inhibitory effect. In addition, some scholars believed that there is a non-linear relationship, namely, U-shaped and inverted U. The inconsistency of the research findings can lead to the cognitive dilemma of how to control the relationship. Only a few scholars summarized the promotion effect, and hadn’t investigate the inhibition mechanism of transformational leadership on creativity. Aiming at the shortcomings, based on related research results, this paper refines the double-edged sword effect, and sums up of the nonlinear relationship. In terms of promotion mechanism, transformational leadership promotes individual creativity through motivation, cognition, and emotion mechanism, and improves team creativity from team cognition and team interaction mechanism. In terms of inhibitory mechanism, transformational leaders inhibite individual creativity through cognitive and emotional mechanism, and team creativity can be impeded by team cognition and team interaction mechanism. Therefore, future researches should intensify the negative aspects of transformational leadership from the perspective of equilibrium, reveal the relationship between transformational leadership’s dimensions and multilevel creativity from the perspective of system, deeply explore the complex mechanisms of the effects from the perspective of integration, discuss the boundary condition of the effects from the perspective of contingency, promote the cross-cultural study from the perspective of situation and strengthen the diversity and scientific level of research from the perspective of methodology. The double sword effect of transformational leadership on creativity needs a comprehensive focus on. The positive effect should be researched to be applied to organizational innovation practice, so as to enhance the level of creativity; however, the negative effects need to be further explored and prevented in the management practice.