The purpose of this study was to examine several potential sources of preservice teachers’ perceptions of their teaching efficacy during their reading and writing lessons. More specifically, the study explored the relationship between the sources of preservice teachers’ self-efficacy and teachers’ perception of efficacy in the areas of instructional strategies, classroom management, and student engagement. Forty-three preservice teachers in pre-literacy methods courses and fourteen in post-literacy methods courses completed the survey, which consisted of the Teacher Sense of Efficacy Scale (TSES) and Teaching Efficacy Sources Inventory. Paired t-test results showed that preservice teachers’ teaching efficacy increased in the three subscales of instructional strategies, classroom management, and student engagement by the end of the literacy method courses. Efficacy for instructional strategies, classroom management, and student engagement were highly intercorrelated with each other in the pre-test data. The results of multiple regression analysis indicated that personality characteristics, capabilities, motivation, enactive mastery experiences with social/verbal persuasion, and physiological/affective state were significant predictors when efficacy for classroom management was the dependent variable in the post-test data. Findings of this study revealed that preservice teachers’ personality, motivation, and capabilities were one of the important sources to improve their teaching efficacy, in congruence with previous research (Poulou, 2007; Yeung & Watkins, 2000).