In the Australian early childhood sector the role of educational leader emerged as part of a very large process of policy reform that began in 2009. The position of educational leader was established to drive the quality improvement requirements of the reform, but many organizations did not establish these positions until several years after the reforms were introduced. Lack of clear role descriptions and authority make it difficult for educational leaders to fulfil the expectations held of them. This study examines the sense leaders make of the policy reforms and the street-level bureaucracy they perform to translate the policy into action. This sense-making and street-level bureaucracy is taking place in a neoliberal context where, we argue, the demands for professional discretionary decision-making are in conflict with the top-down standardization inherent in neoliberalism. Educational leaders have the potential to challenge neoliberalism through their professional decision-making but, in the Australian context, many are currently focusing on compliance with their street-level bureaucracy.