No Child Left Behind (NCLB) was passed to ensure that 100 percent of students would be proficient by 2014. Progress toward that goal is measured annually and results suggest that while some schools improve, increasing numbers are identified as in need of improvement (INI) and are subject to sanctions. We examined perceived levels of threat rigidity, efficacy, and leadership in 549 California principals whose schools were INI or not. Results suggest that principals in INI schools identified more threat-rigid response and perceived less self-efficacy than in non-INI setting. Results did not indicate differences between principals in perceived transformational and transactional leadership. (Contains 10 tables and 1 note.)