Increasingly, educational leaders have adopted human-resource approaches in school administration. The approach has facilitated the development of transformational leadership. This paper explores in detail the nature of leadership associated with a human-resources approach toward educational administration. The paper describes the theoretical basis of the human-resources approach, defines transformational leadership, examines valuable leader characteristics and effective leadership strategies, and describes the relationship of various theoretical subconstructs to transformational leadership. The subconstructs include vision, motivation, power, decision making, supervision, followership, organizational culture, organizational conflict, organizational change, and organizational learning. Evidence suggests that in effective schools, bureaucratic, mechanistic institutional structures are generally giving way to humanistic, participative modes of organizational behavior that result, in part, from the practice of transformational leadership. One figure is included. (Contains 25 references.) (LMI)