Teachers around the world are expected to respect the diversity of students and differentiate instruction. Therefore, it is important to identify factors that are related to the use of differentiated instruction. The aim of this study was to examine the indirect effects of transformational school leadership on teachers' use of differentiated instruction. Data were collected from 314 Serbian teachers who work in different school settings. Structural equation modelling with latent variables showed that teacher collaboration and self-efficacy had significant direct effects on the use of differentiated instruction. Transformational school leadership positively predicted differentiated instruction via teacher collaboration. Moreover, the obtained results revealed that both teacher collaboration and self-efficacy mediate the relationship between transformational school leadership and teachers' use of differentiated instruction. Implications for educational policy and practice were discussed.