The purpose of this research was to investigate the relationship between principals' and teachers' self-efficacy beliefs. The study focused on the efficacy beliefs in instructional leadership, instructional strategies, school management, classroom management, and the effect of specific demographics on efficacy beliefs. The study, conducted during the 2012-13 school year, included a random sample of 91 principals and 177 teachers from school districts throughout South Dakota. "The Principal Sense of Efficacy Scale," by Tschannen-Moran, M., and Gareis, (2004) was used to measure principals' sense of efficacy and the "Teacher Sense of Efficacy Scale," by Tschannen-Moran and Woolfolk Hoy (2001), was used to measure teachers' sense of efficacy. On the basis of the analyses of data in this study, three overarching conclusions were drawn: First, principals with a higher self-efficacy were associated with a teaching staff with higher self-efficacy. The interaction of the school principal and the teacher is reciprocal. The efficacy of the teacher can influence the efficacy of the principals just as the efficacy of the principal can influence the efficacy of the teacher (Bandura, 1986). Second, personal characteristics such as instructional level, college degree and experience, and school characteristics such as socio-economic status and school/class size were not related to perceptions of self-efficacy. Last, female teachers were associated with higher self-efficacy beliefs than male teachers. Study results imply school districts should acknowledge the relevance of principals' self-efficacy and teachers' self-efficacy in relation to student achievement and bringing about improvements in schools. Principals should complete the "Principal Sense of Efficacy Scale" and teachers should complete the "Teacher Sense of Efficacy Scale" and reflect upon results and their meaning. principals need to purposefully devote time to increase their own self-efficacy and engage with their teachers in ways known to improve their self-efficacy. School boards should consider principal self-efficacy perceptions before hiring any person as the principal of the school. Lastly, principals should consider teacher self-efficacy perceptions before hiring any person a the teacher in a school. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com/en-US/products/dissertations/individuals.shtml.]