This study examined how teacher (teaching experience, perceptions of teacher collaboration and teacher influence) and classroom (children's engagement) characteristics predicted teacher self-efficacy for 48 preschool teachers in the U.S. Results showed a significant interaction effect between teachers' perceptions of collaboration and children's engagement in predicting teachers' reported self-efficacy. Specifically, a higher level of children's engagement was associated with a higher level of teacher self-efficacy when teachers worked in preschool with high levels of staff collaboration. Teacher experience and influence in decision-making were not related to teacher self-efficacy. Implications for early childhood teacher education and professional development are discussed.