The purpose of this research was to investigate the extent to which self-efficacy acts as a mediating variable between the learning environment and achievement. Seven year 5 classes (N = 179 students aged 9 to 10 years) were allocated randomly to cooperative, competitive or individualistic environments for twice-weekly social studies lessons, changing environments after five weeks. Data collected on self-efficacy and achievement in weeks 5 and 10 indicated that co-operative environments led to higher self-efficacy and achievement as well as more appropriate behaviour. The performance of particular tasks under competition appears to be enhanced when students have previously worked co-operatively, but may be difficult to sustain as self-efficacy and behaviour standards decline.