The first major study of trust between principals and teachers in Australia reveals that trust is crucial for effective school leadership. The research data produced in a multiple case-study of trust relationships between teachers and principals in Victorian schools showed that a combination of principals' personal and professional work practices attracts teachers' trust. When principals lose teachers' trust, collaboration can founder, and staff fear, alienation, and disenfranchisement develop. Principals face numerous challenges when endeavouring to engender and maintain trust. Some challenges can be met by individual and organisational learning; others require greater employer co-operation and assistance. Recent externally driven reform initiatives have failed to capture teacher commitment. The role of principals in implementing non-negotiable reforms often jeopardises the nature and extent of teachers' trust in them. The study underscores the need for reformers seeking lasting school improvement to take account of the values of public school practitioners when designing change initiatives.