The main objective of this study was to investigate the effect of principal's leadership style on school outcome. This study focused on the indirect relationship between the leadership style and the school environment. An additional objective was to investigate the impact of culture on leadership style as related to school environment and outcome. Data from the TIMSS 1995 on Kuwait and the USA were used in this empirical investigation. Descriptive statistics and an ANOVA were used in the statistical analysis. Several conclusions were found in this study. The data analysis supported the hypothesis that the principal's leadership style was related to school outcomes. This relationship is found to be direct and indirect through the school environment. In the USA schools, the integrative principal leadership style is found to encourage and create a cooperative school environment for better school outcome than schools with authoritative principals. The principal's leadership style was found to be very different between Kuwait and USA school. Kuwait schools' principals are authoritative in their leadership style, while their USA counterparts tend to be integrative. Interestingly, although Kuwait school principals are authoritative in nature, data indicated that a cooperative school environment showed higher school outcomes. This suggests that the USA model is inapplicable in a culture similar to Kuwait. This study also concludes that there are no universal or appropriate leadership styles for all cultures.