The effect of a precise goal-setting process on teacher- and student-attitude and on student achievement was studied among 17 nonpermanent-status teachers of first through sixth grades as well as among their 371 students used as a secondary sample population. The concomitant purpose was to assess the principal's leadership in staff development and teacher-attitude modification. Teacher subjects were assigned to the experimental and control groups, eight in each. During the 8-week period, the experimental group was invited in conferences with the principal to complete goal-setting processes by which initiative, originality, communication, empathy, and productivity were encouraged. Evaluative devices were constructed to gather data on the part of teachers and students, and the principal's role was self-evaluated. It was concluded that the mutual goal-setting concept effected better teacher-principal relationships and improved teacher attitudes toward both seeking and accepting leadership in guidance and counseling. The principal's role was enhanced through such an interacting process. Further studies were recommended for the improvement of instructional techniques, redefining of the principal's role, and deepening of the research areas explored in the present article. (CC)