Effective schools literature has emphasised the leadership roles played by school principals in influencing a school's learning environment and teacher satisfaction outcomes. Moreover, transformational leadership theory has provided a new perspective from which to view these relations. Advocates of transformational and transactional leadership behaviour claim that leaders have the ability to effectively manipulate their environments to achieve their organisational objectives. However, a third type of leadership behaviour, laissez-faire leadership, has recently been demonstrated to have marked positive effects on a number of school learning environment constructs. This paper reports on an investigation of the relation between laissez faire leadership behaviours of school principals in NSW public secondary schools and seven dimensions of school learning environment. A survey was conducted across 52 secondary schools in NSW, Australia, involving 458 respondents. Data was gathered on the leadership style of school principals and seven school learning environment constructs. Multilevel modelling analysis was used to explore the relation between laissez-faire leadership behaviour and the school learning environment dimensions both at the teacher and the school level. Laissez-faire leadership behaviours demonstrated a differential impact on school learning environment, in some cases more influential than alternative types of leadership behaviour.