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Teacher effectiveness varies substantially, yet principals’ evaluations of teachers often fail to differentiate performance among teachers. We offer new evidence on principals’ subjective evaluations of their teachers’ effectiveness using two sources of data from a large, urban district: principals’ high-stakes personnel evaluations of teachers, and their low-stakes assessments of a subsample of those teachers provided to the researchers. We find that principals’ evaluations of teachers are quite positive whether the stakes are high or low, but the low-stakes evaluations show substantially more use of lower rating categories, and many teachers rated ineffective on the low-stakes assessment receive “effective” or “highly effective” high-stakes ratings. Teacher characteristics, such as experience, partially explain the discrepancy between the two scores. Also, despite the fact that principals overwhelmingly assign teachers to the two highest rating categories on the high-stakes evaluation, their high- and low-stakes ratings show similar correlations with teacher value-added measures.