Quality of educator-child interaction is a well-established predictor of children's well-being and development. Situational and personal characteristics seem to play an important role in the quality of interactions. More challenging situations, such as a large number of children or activities like meals or transitions, show lower quality. One important personal characteristic might be educator self-efficacy. However, empirical findings of the relation between self-efficacy and interaction quality are inconsistent. Situational characteristics might explain these inconsistent findings. We investigate the effects of educator self-efficacy as well as situational characteristics on the observed interaction quality and the moderating role of the situation on the relation between educators' self-efficacy and interaction quality. A total of 245 early childhood care educators from 103 groups in Switzerland participated. A self-report questionnaire was used to assess educators' self-efficacy. Interaction quality was observed using a standardized observation tool (CLASS Toddler). Results confirm that the presence of many children and activities like meals, routines, and transitions are related to lower interaction quality. Including situational characteristics like group size or mealtimes yielded some significant -- and partly contradictory -- associations between educator self-efficacy and interaction quality. We discuss the still unclear and partly problematic transmission of self-efficacy into interaction quality.