Principals are leading schools during a time of continuous change. Society, students, and expectations are always evolving and school principals are focusing much of their work on transforming their students and schools. However, prior to the 21st century there was little attention paid to the performance evaluation of school principals. The Performance Evaluation Reform Act (PERA) enacted new law on how principals were to be evaluated in Illinois. This study researches the influence that the performance evaluation process, under the constraints of PERA, has on the transformational leadership abilities of school principals. This study also researches the influence of the evaluator-principal relationship on the principal's transformational leadership abilities. It concludes with findings that support the use of many of the practices embedded in PERA paired with the development of supportive relationships between evaluator and principal.