Perceived overqualification refers to a situation in which an individual’s qualifications, such as their education, work experience, and skills, are beyond the requirements of a job. Previous studies have highlighted that perceived overqualification is a critical antecedent of innovative behavior. However, recent research has reported mixed findings concerning the relationship between perceived overqualification and innovative behavior. We employed regulatory focus theory to examine whether employees’ promotion focus moderates the relationship between perceived overqualification and innovative behavior. Moreover, we explored whether work engagement can mediate this moderating effect. To enhance generalizability, we collected data from various industries and from multiwave and multiple sources. In total, 264 valid paired questionnaires were returned. The results of Mplus revealed that (1) the perceived overqualification of employees with higher levels of promotion focus was positively related to innovative behavior, whereas the relationship was negative for employees with lower levels of promotion focus and (2) work engagement mediated the interactive effect of perceived overqualification and promotion focus on innovative behavior. Finally, further theoretical and practical implications, limitations, and future research are discussed on the basis of our findings.