The importance of collective teacher efficacy (CTE) has been increasingly emphasised, but few studies have focused on how it can be enhanced. Since CTE is assumed to be related to factors that differ between schools, the belief-shaping sources of CTE could be related to principals' beliefs of their efficacy. Moreover, a school climate that centralises teachers' attempts to improve student learning could enhance CTE. This paper examines a proposed analytical model that links principal self-efficacy (PSE) to CTE, as mediated by the school climate. The model is tested via a multilevel analysis with data from 70 Finnish schools and 767 educators. The analysis revealed that PSE is partially and indirectly related to CTE via the school climate at the school level. Based on these results, theoretical and practical implications for future research and teaching development efforts are discussed.