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 stan