As well as looking at the historic development of faculty-principal relations, this paper focuses on current changes in and challenges to the principal's role. The paper contends that faculty-principal relations are central to what happens in education. It maintains that dramatic changes in schools demand new value orientations and styles of administration from principals. Most profound appear to be the changes in administrator power and role brought about by teachers' unions. Yet, the author maintains that a "new breed" of principals will have the ability to successfully meet these challenges. Characteristics of this new type of administrator include the ability to avoid "administrivia," to analyze educational problems, to continually learn new competencies, and to visualize the school system as a living organism. Principals will be mediators of conflict, will be able to manage change, will coordinate specialists, and will be neither frightened nor foolhardy in the face of violence. Finally, the author concludes that future leadership will be in a different style but it will still be in demand and of importance. (Author/JM)