Evidence is emerging that teachers’ dispositional characteristics are related to students’ classroom functioning, but processes are not well understood. We examined associations between second‐grade teachers’ effortful control (EC), student‐teacher closeness or conflict, students’ EC, and changes in students’ externalizing behaviors and reading and math achievement. Teachers’ EC was directly related to their students’ externalizing behaviors, but not achievement. Conflict, but not closeness, mediated associations between teachers’ EC and students’ externalizing behaviors. In moderated mediation tests, conflict was positively associated with externalizing behaviors most strongly for students low or moderate in EC. Closeness was positively associated with reading achievement, and negatively associated with math achievement, only for low‐EC students.