This paper describes the theory of professional competence in teaching of mathematics developed through a cross-cultural examination of teaching practices of mathematics teachers recommended as competent by their principals in two selected high-achieving high schools of India and the United States. A detailed study of teacher cases from both of the research settings yielded a rich conceptualization of the relationship between teachers' professional knowledge base and professional competence in the teaching of mathematics. The substantive theory explains the processes of both the development and the display of professional competence and enables predictions of the ways teachers would most likely utilize to meet the performance expectations of their work environments. The study makes a unique contribution to the field of teacher education and views professional competence as a dynamic interplay of various components of teachers' professional knowledge base activated in actual teaching situations in the context of the classroom, school, and wider social culture.