Issues in construction safety in Tanzania cast a long shadow, claiming lives and hindering project success. Understanding the complex dynamics at play is crucial for improving safety performance. This research aims to develop a system dynamics model to understand the factors influencing safety performance in building construction projects. Smart PLS was used to identify key variables using factor reduction, and 19 factors were determined as key factors to be used in this study from 143 variables from a questionnaire; then, STELLA was used to develop system dynamic modelling. A study was conducted on 255 building construction projects in five regions of Tanzania, Dar es Salaam, Dodoma, Arusha, Mwanza, and Mbeya, and later, the model was tested in one contractor’s company. By simulating the interactions between these diverse elements and their impact on accident rates, it was found that both safety performance and safety management processes for construction projects are not stagnant but are expected to rise at the beginning of the project and to grow steadily as the project execution approaches its end. The sensitivity analysis conducted on the system dynamics model found that the extent, frequency, and cost of incidences are positively correlated. This study contributes facts on the status of safety climate, a new definition of safety climate, and the integration of different analysis methods in evaluating safety performance in Tanzania.