Many states require prospective principals to pass a licensure exam as a condition of obtaining an administrative license. Little is known, however, about the potential effects of principal licensure exams on the pool of available principals or whether exams are predictive of later job performance. We investigate the most commonly used exam, the School Leaders Licensure Assessment (SLLA), using ten years of data on test takers in Tennessee. Our analysis uncovers two main results. First, there are substantial differences in passage rates by test-taker race and gender. In particular, nonwhites with otherwise similar characteristics are 17–18% less likely than whites to attain the required minimum score for licensure. Second, although applicants with higher scores are more likely to be hired as principals, we find no evidence that SLLA score predicts potential measures of principal job performance, including supervisors’ ratings from the statewide evaluation system or low-stakes leadership ratings from a statewide teacher survey. Our results raise questions about whether conditioning administrative licensure on SLLA passage is consistent with the goal of a diverse principal workforce.