Most countries across Europe now have their own Inspectorate as part of a school improvement and accountability system. However, there has been little research on the impact of school inspections or on the aspects of school inspections that maximise the positive effects and minimise the unintended consequences. As a precursor to further research, this paper presents a program theory of the school inspection system in England (Ofsted), highlighting the underlying mechanisms that explain how Ofsted intends to promote school improvement. The program theory is derived in a systematic way using the policy scientific approach, which draws evidence from the multiple methods of interviews and source documents. The key mechanisms that underpin Ofsted's promotion of school improvement were found to be the setting of standards, giving feedback, the use of sanctions and rewards, the collection of information on schools and public accountability. Details showing the logic behind these mechanisms are presented. The program theory is validated by senior personnel from Ofsted. The paper argues for more research in evaluating the impact of school inspection and the specific mechanisms that underpin it.