The present study aims to examine whether principals’ emotional intelligence (specifically, their ability to recognize emotions in others) makes them more effective transformational leaders, measured by the reframing of teachers’ emotions. The study uses multisource data from principals and their teachers in 69 randomly sampled primary schools. Principals undertook a performance task to allow assessment of their emotion recognition ability; half the teachers’ sampled (N = 319) reported on principals’ leadership behaviors and the other half (N = 320) on teachers’ subjective perceptions of principals as promoting teachers’ reframing of negative emotions into more positive ones. Data were analyzed through multilevel structural equation modeling. Findings indicated a cross-level relationship between principals’ transformational leadership behaviors and teachers’ emotional reframing, as well as a relationship between principals’ emotion recognition ability and their transformational behaviors. Furthermore, the study revealed that principals’ emotion recognition ability has an indirect effect on teachers’ emotional reframing through principals’ transformational leadership behaviors. The results provide empirical support for the claim that transformational leadership promotes emotional transformation. The theoretical and practical implications of the study are discussed.