This article examines the effects of the leadership style of the principal, "transformational leadership and transactional leadership", along with teachers' job satisfaction on schools' organizational health. Specifically speaking, it investigates to what extent the variations in school health can be related to the principal's leadership style and teachers' job satisfaction. To this end, a Likert-type questionnaire was administered to 635 teachers working in Turkish schools out of a 875-person sample. Path Analysis was used to explain the direct and indirect relationships between the dependent and independent variables. As a result of the analysis, the most striking finding is that transformational leadership has a profound impact on teachers' job satisfaction, while the transformational leadership of the principal directly and, through teachers' job satisfaction, indirectly affects the school health. (Contains 3 tables and 2 figures.)