Since 2010, the Bhutanese education system has emphasised values education through its own unique approach known as 'Educating for Gross National Happiness' (referred to as GNH Education). This policy outcome emerged from the concern, shared by some Bhutanese leaders and educators, over the apparent deterioration of human values among youth in Bhutan. GNH Education was regarded by the Government of the day as critical for the sustained development of Bhutan. With GNH Education in place, the intention was that GNH values and principles would eventually be deeply embedded in the consciousness of every youth in Bhutan through implementation of an holistic approach to student development led by principals and teachers as key change agents. This study investigated the nature of principals' and teachers' self- and collective efficacy beliefs with respect to capabilities for GNH Education. Also of interest were their lived experiences, as they were involved in implementing GNH Education in its early stages and their relationships to different facets of GNH Education school contexts. Knowledge generated from this study was intended to contribute to an understanding of how schools (principals and teachers) have responded to the GNH Education challenge in local and national contexts.