This article examines principal leadership and teacher motivation in schools under accountability sanctions. The conceptual framework is grounded in research on expectancy theory and transformational leadership. The study involves a survey of Chicago teachers and indicates that principal instructional leadership and support for change are associated with teacher expectancy. In addition, teacher experience, advanced education, and race, as well as the school's performance level, are associated with teacher expectancy. Finally, teacher expectancy is associated with a school's ability to move off of probation status. These findings have important implications in the current policy context. (Contains 7 notes, 6 tables, and 1 figure.)