--- - |2 Abstract The principal's leadership style is one of the most common ways of conceptualizing school leadership behaviours. We lack understanding, however, of how the effectiveness of school leadership styles varies across degrees of challenging circumstances. Data obtained from a quantitative survey of primary school teachers in Israel (N = 570) and from the Ministry of Education database were used to account for principals' leadership styles and their effectiveness in schools facing more challenging circumstances (N = 15) and in those facing less challenging circumstances (N = 46). Differences were found in the relations between principals' transactional behaviours on one hand and the teaching dimension of school culture and principals' perceived effectiveness on the other, as a function of challenging school circumstances. The study also found a difference in the relations of principals' transformational behaviours and the safety dimension of school culture, by level of challenging school circumstances. The data also revealed that in schools facing less challenging circumstances, principals' passive behaviours were related to students' achievements and principals' perceived effectiveness, but not in schools facing more challenging circumstances. The findings and their implications are discussed. - Journal of Community & Applied Social Psychology, Volume 28, Issue 5, Page 348-364, September/October 2018.