Since 2001, Indonesian schools have implemented a mandatory school-based management (SBM) policy for better quality education in general and more particularly for better school improvement and student achievements. The major purpose of this paper is to explore the conditions of school improvements resulted from SBM policy and programs. In view of the fact that there have limited previous studies to make a valid claim on SBM results for better school environment and student achievements, an empirical survey was conducted in both primary and junior high schools of Denpasar district municipality in Bali, Indonesia. In addition to the survey, qualitative research with focus group discussions and in-depth personal interviews were conducted with the active participation of 43 key school stakeholders, including principals, council members, teachers who experienced in operating school councils, and education department authorities. Results of both quantitative and qualitative data analyses affirm that devolving authority to school level decision-makers has resulted in increased participation and commitment, which led to improved teaching--learning environment. This study suggests the significance of sustainable empowerment on the part of school councils as well as leadership in-service training to school principals for an effective implementation of SBM policy and practices in developing countries.