This paper reports findings from the first 2 years of a longitudinal study of school effectiveness in Western Australia called the Western Australian School Effectiveness Study (WASES). Creemer's multilevel model of educational effectiveness was used to guide the selection of variables for analysis. Data on the school environment, the classroom learning environment, student background variables, teacher and student self-concept, teacher morale, and science and mathematics achievement were collected twice for each of 849 students in 4 urban, 10 rural, and 7 remote high schools. School effectiveness was defined in two ways: in terms of academic achievement and in terms of teacher morale as a reflection of educational environment. Most of the variation in science and mathematics achievement was explained by student-level variables, particularly socioeconomic status, gender, aboriginality, English-speaking background, and academic self-concept. Virtually no variance in achievement was explained by school-level variables, although some differences among classes may be attributable to differences in teacher characteristics, peer effects, or classroom environment. There were no rural-urban differences in student achievement after controlling for student characteristics and previous achievement. When school effectiveness was defined in terms of teacher morale, effective schools had teachers with higher self-concept, higher levels of teacher supportiveness of students, and more clearly defined mission. (Contains 96 references and 18 data tables and figures.) (SV)