This study aims to analyze the relationship between principal's supervision of instruction, teachers' knowledge sharing and teachers' professional development by using mediated-effects model. Previous studies normally use directed-effects model. However, the use of directed-effects model does not resolve the most important theoretical issues concerning the means by which principals achieve an impact on teachers' professional development through teachers' knowledge sharing. Therefore, we use mediated-effects model to analyze the relationship in this study. By using product-moment correlation, regression analysis and the structural equation modeling (SEM), this study examined the relationship between principal's supervision of instruction and teachers' professional development mediated by the condition of knowledge sharing. Three related questionnaires were used to measure the major variables while data was collected of teachers in Pingtung County. It was found that principal's supervision of instruction can predict teachers' knowledge sharing and principal's supervision of instruction and teachers' knowledge sharing can also predict teachers' professional development. Also, the result from mediated-effects model indicated that knowledge sharing had the significant mediated effects of supervision of instruction on teachers' professional development.