Purpose: The paper sought to clarify the concept of learning organisation/community; to identify the barriers that are perceived to obstruct the creation of learning communities out of traditional schools; to identify how principals go about the task of converting their schools; and the special characteristics of leadership required to transform schools successfully. Design/methodology/approach: The study was dependent on an extensive review of the literature and generated data from structured interviews of principals from the New South Wales (Australia) public education system. Findings: Respondents lacked a clear understanding of a learning organisation despite their actions to implement the concept in their own schools; the concept may indeed be too abstract to enable a suitable workable definition; there is, nevertheless, a strong belief that the concept has much to offer; leadership is the key factor in transforming schools; and traditional school structures and cultures, lack of implementation time, and difficulty in obtaining the support of staff and parents are seen as the main barriers to implementation. Originality/value: The paper explores extensively the possible implications of the study and addresses these to schools and school systems, principals, teachers and parents. (Contains 2 figures.)