Over the past 50 years, theoretical and methodological problems have plagued the study of leadership. This paper reviews the literature in the areas of leadership; leadership theories; leadership styles; and the effect of principal leadership on teachers' morale, performance, and student achievement. The literature shows that principal leadership styles and leadership effectiveness are related to teachers' morale and performance; and that leadership styles and principal effectiveness affect teachers' job dimensions, which in turn mediate low teacher morale. Teachers are uplifted by principals who effectively define the school mission, manage the instructional program, and promote a positive school-learning climate. In addition, a collaborative leadership style has the greatest impact on teacher morale. (Contains 126 references.) (LMI)