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During the last decade the research literature has shown a growing interest in teacher stress and teacher self-efficacy and how these constructs are related. In this chapter, we review current research on relations between teacher stress and teacher self-efficacy, how these constructs are influenced by the school context, and how they relate to teacher engagement and well-being. Teacher stress and teacher self-efficacy are consistently shown to be negatively related and to predict teachers’ cognitive, emotional, and behavioral responses differently. For example, teacher stress correlates negatively with teacher job satisfaction and job commitment, but positively with burnout and teacher attrition, whereas teacher self-efficacy correlates positively with teacher job satisfaction and job commitment, but negatively with burnout and teacher attrition. We propose a model of relations between stressors in the school environment, social support, teacher self-efficacy, teacher stress, and outcome variables such as work engagement and burnout. We then report an interview study which examines experiences of stress and self-efficacy among senior teachers who chose early retirement after long periods of sick leave and teachers who were still teaching and thriving at the ages of 63 and 65.