The study examines the impact of ethical leadership to create a sustainable workplace environment with its dimensions such as moral values and fairness, clarification of roles and sharing of power on job stress with moderating role of an employee’s locus of control.  Throughout history among various leadership models, ethical leadership is an exclusive form of leadership. Ethical leaders have a significant role in generating a motivational tool, where employees feel more satisfied, and this can lead to their improved sustainable performance. Administrators usually adjust their leadership behavior to accomplish the organization goals, and this could influence the employees' job satisfaction and their work. The current study is a cross sectional investigation and various research methodologies were used for interpretation and analysis. For this study we used an adaptive questionnaire from previous studies to measure the relationship among variables and test the hypothesis. The sample is of 271 questionnaires that are filled in by middle and top-level managers in the service sector firms. A descriptive analysis is done, followed by reliability analysis and hypotheses testing using correlation and regression analysis. And for checking the moderating effect of locus of control we used moderation analysis (model No. 1) proposed by Hayes (2013). The results revealed that ethical leadership dimensions like moral values and fairness, clarification of roles and sharing power have a strong impact on job stress with locus of control acting as a moderating variable which moderates ethical leadership and job stress relationship.