Teacher self-efficacy is among the most important motivational constructs in teacher education research. Limited studies have examined changes during the transitioning period from preservice into the first years of formal school teaching. This mixed-method study reports on changes in teacher self-efficacy (TSE) and its sources from the completion of the final professional experience placement into the first year of school teaching. Seventy-one preservice teachers completed the three-dimensional Scale for Teacher Self-Efficacy twice (pre and post), of which seven were followed up for an in-depth interview after their first teaching term. Multilevel modelling and thematic synthesis were conducted to analyse the quantitative and qualitative data respectively. TSE for classroom teaching increased significantly whereas that for external classroom activities was of concern. Mastery experiences based on mentorship, students, the types of teaching contracts, and the school administration were the most influential source of TSE, followed by physiological and affective states. Verbal persuasion and vicarious experience were mentioned infrequently. Implications and suggestions for future study are discussed.