: School-based management is school management system that gives the school the authority and power to regulate school in accordance with school's potential, demand and the need. This research aimed to find out principal's leadership in improving the quality of education, implementation, and obstacles faced in implementing school-based management. To achieve these objectives, this research employed qualitative approach. Data was collected through interview, observation, and documentation study. The procedures of data analysis were data reduction, data display, and verification. The research subjects were principal, vice-principal, and teachers. The results showed that; (1) principal leadership in improving the quality of education was implemented by adjusting the policy rules and school's objectives, combining the work system with school's resources in order to obtain high achievement with a focus on improving the learners' quality. (2) The implementation of school-based management to achieve education programs was implemented by formulating the socialization stages, vision, mission, school's objectives, school's challenges, and SWOT (Strength, Weakness, Opportunities, and Threats) analysis. (3) The obstacles were not arisen in implementing school-based management if it was viewed from staff/employees condition. The teacher condition was not good in discipline and responsibility and the school was not good in government transportation.