Abstract Background Poor indoor air quality (IAQ) and psychosocial problems are common in schools worldwide, yet longitudinal research on the issue is scarce. We examined whether the level of or a change in pupil-reported school environment (IAQ, school satisfaction, and bullying) predicts recorded sick leaves among teachers. Methods Changes in the school environment were assessed using pupil surveys at two time points (2001/02 and 2004/05) in 92 secondary schools in Finland. Variables indicating change were based on median values at baseline. We linked these data to individual-level records of teachers’ (n = 1678) sick leaves in 2001–02 and in 2004–05. Results Multilevel multinomial logistic regression models adjusted for baseline sick leave and covariates showed a decreased risk for short-term (one to three days) sick leaves among teachers working in schools with good perceived IAQ at both times (OR = 0.6, 95% CI: 0.5-0.9), and for those with a positive change in IAQ (OR = 0.6, 95% CI: 0.4-0.9), compared to teachers in schools where IAQ was constantly poor. Negative changes in pupil school satisfaction (OR = 1.8, 95% CI: 1.1-2.8) and bullying (OR = 1.5, 95% CI: 1.0-2.3) increased the risk for short-term leaves among teachers when compared to teachers in schools where the level of satisfaction and bullying had remained stable. School environment factors were not associated with long-term sick leaves. Conclusions Good and improved IAQ are associated with decreased teacher absenteeism. While pupil-related psychosocial factors also contribute to sick leaves, no effect modification or mediation of psychosocial factors on the association between IAQ and sick leave was observed.