Purpose: Public schools operate in a changing and dynamic environment evident in technological innovations, increased social heterogeneity and competition, all contributing to school leaders' uncertainty. Such changes inevitably influence schools' inner dynamic and may therefore undermine schools' organizational health. School leaders have a crucial role in buffering these external influences and promoting schools' organizational health. The purpose of this paper is to assess the role transformational school leaders play in mediating the relationship between perceived environmental uncertainty and schools' organizational health in a context characterized by uncertainty and instability which follow political instability. Design/methodology/approach: The researchers administered questionnaires to 954 teachers coming from 191 randomly sampled public elementary schools in Israel. Findings: Results indicate a negative impact that perceived environmental uncertainty has on schools' organizational health evident in the degree of academic emphasis and staff affiliation with the school, in the school's institutional integrity, and in the principal's ability to both secure resources for the school and demonstrate collegiality toward teachers. Findings also show that transformational school principals are able to moderate the negative impact environmental uncertainty has on schools' organizational health. Originality/value: The findings validate the growing uncertainty characterizing the environment in which public schools operate. They further strengthen existing knowledge on the transformational leadership style in light of its unique capacity to buffer negative external influences imposed on schools and maintain their organizational health.