The purpose of this research is to analyze the effects of Principals' leadership style (transformational and transactional leadership) on teachers' morale and school organizational effectiveness. To achieve this purpose, the questionnaire research was done to the teachers (n=316) in special schools (n=11) and it was analyzed. The data showed the higher 'transformational leadership' and 'contingent reward' were, the higher teachers' morale and school effectiveness were. But, if other factors of transactional leadership were high, teachers' morale or school effectiveness could be low. Consequently, principals' leadership is very important because it affects teachers' morale and school effectiveness in a different way. In particular, if the level of transformational leadership and contingent reward were made high, it could result in enhanced levels of teachers' morale and school effectiveness.
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