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This study aims to: (a) examine the direct and indirect relationships between principal leadership and student achievement through organizational processes in Hong Kong and Macau, and (b) investigate how the mechanisms linking principal leadership to student achievement differ across school contexts. Using multigroup multilevel structural equation modeling (MGMLSEM) and PISA 2022 data from 209 schools, the study finds that school context not only matters for both leadership and student outcome but can also moderate both the magnitude and the mechanisms of leadership influence. This study responses to the conference theme and advances the understanding of leadership effectiveness by tackling the dimension of “under what circumstances does leadership matter most, and in what ways should leadership be exercised given those circumstances?”