For more than a decade, the Government of Hong Kong has instituted a policy of school decentralization aimed at devolving authority to all stakeholders, including the representatives of School Sponsoring Bodies, principals, teachers, parents, and community members. This study examines the relative contribution of two dimensions of school decentralization-- teacher participation and school autonomy-- to students' mathematics performance, and examines the role of school climate as a mediating variable between decentralization and performance. Data for the present study come from the second cycle of the Programme for International Student Assessment (PISA 2003), which is a large international assessment measuring 15-year-old students' literacy performance across over 40 countries and regions around the world. Using multi-level analysis, the study finds that teacher participation is more important than school autonomy for student mathematics performance in Hong Kong. In addition, the effect of teacher participation on students' performance is mediated by four major school climatic factors--sense of belonging, disciplinary climate, students' morale and student behaviour--in Hong Kong's secondary schools.