Compassion in the school setting traditionally defines students as the recipients. Teachers, on the other hand, have yet to be studied as such. This study examines the effects of compassion expressed by teaching colleagues and school principals on teacher school engagement and subjective well-being at work. A sample of 226 teachers in Israel filled out a questionnaire in which they rated the amount of compassion received from their school colleagues and principals, as well as their job satisfaction, organizational commitment, emotional vigor, and burnout. Multi-level modeling analysis techniques showed that expressions of compassion from teaching colleagues and principals related positively to teachers' sense of emotional vigor, organizational commitment, and job satisfaction, but negatively to teacher burnout; this relationship was mediated by teacher positive affect (PA). Furthermore, there was evidence for the role of compassion in coping with the stressful teaching conditions inherent to the profession. The mediation relationship through teacher PA as moderated by student-misbehavior stress was strongest when student-misbehavior stress was high, and provided teachers with the ability to cope with the stressful condition and maintain work outcome levels (emotional vigor, burnout, organizational commitment, and job satisfaction). These findings emphasize the crucial role of compassion in the workplace, and suggest it should be targeted by principals and other educational decision makers.