The increasing emergence of participation in decision making (PDM) in schools reflects the widely shared belief that flatter management and decentralized authority structures carry the potential for promoting school effectiveness. However, the literature indicates a discrepancy between the intuitive appeal of PDM and empirical evidence in respect of its sweeping advantages. The purpose of this theoretical article is to develop a comprehensive model for understanding the distinct impacts of PDM on school and teachers' outcomes. The proposed analytical framework is set within contingency theory and is aimed to predict the distinct impacts of PDM on school outcomes: innovation, organizational citizenship behavior (OCB), and productivity; and on teacher outcomes: job satisfaction and strain. It contains mediator-moderator components, where the mediator factors explain the relationship between PDM and school and teacher outcomes and the moderator factors influence the strength and/or the direction of these relationships. Specifically, the framework suggests that two mechanisms, one motivational and one cognitive, serve as mediators in the PDM-outcomes relationship. Then, by taking a multilevel perspective, the author posits moderators that may facilitate or inhibit the PDM effect: teacher personality (the Big Five personality characteristics) at the individual level, principal-teacher exchange (leader-member exchange; LMX) at the dyadic level, structure (bureaucratic/organic) at the school level, and culture (individualism/collectivism) at the environmental level. (Contains 1 figure.)