Purpose: Studies have shown that teachers' perceptions and expectations of their working environment shape their perceived stress. The present study draws upon implicit leadership theory and builds on the job demands-control (JD-C) model to investigate whether there are differences in the implications of participative decision-making and paternalistic leadership for teachers' perceived stress in the Israeli Arab education system. Design/methodology/approach: Data were collected through validated questionnaires returned by a two-stage cluster random sampling of 350 teachers randomly chosen from 70 Israeli Arab elementary schools. Paternalistic leadership and participative decision-making were considered as group-level variables to lower the risk of common method variance. The proposed model was tested through hierarchical regression analysis. Finally, to test the hypothesis that paternalistic leadership and participative decision-making standardized beta weights were statistically significantly different from each other, their corresponding 95% confidence intervals were estimated via bias corrected bootstrap (1000 re-samples). Findings: The findings indicated differences in the levels of the principal's paternalistic leadership and participative decision-making as perceived by the Israeli Arab teachers. Also, the results indicated that participative decision-making was negatively correlated with teachers' perceived stress beyond the influence of paternalistic leadership. Originality/value: Examining teachers' working conditions and resources can be important since they affect teachers' perceived stress, which may in turn affects school results in the Arab education system in Israel. This study can contribute to the development of training programs for teachers to improve and adapt principals' leadership practices to the sociocultural context of the Arab education system in Israel.