Bandura (in: Pajares and Urdan, Self-efficacy beliefs of adolescents, Information Age, Greenwich, 2006) suggested that efficacy beliefs should be considered in relation to key challenges within a (teaching) context. As part of a larger project on the teacher efficacy beliefs of Japanese high-school teachers of English (JTEs), this paper reports exploratory findings of (i) the key domains of challenge in which JTEs’ teacher efficacy beliefs operate; and (ii) sources of information that may influence the formation and substance of those beliefs. Data from interviews with six purposively selected participants were analysed using a theoretical thematic analysis approach. Eight domains of teacher challenge were identified, comprised of individual and collective dimensions of teacher efficacy towards L2 usage, L2 instruction and teacher collaboration. Collaborative action was found to be a key challenge, suggesting that professional development should focus on strengthening JTEs’ beliefs about collective capability. Results suggest that social feedback by colleagues is a key source of efficacy, especially for novices. This may reflect cultural influences in the Japanese context. Personal and vicarious experiences of teaching were also identified as efficacy-forming sources. It seems also that past learning experiences act as sources of efficacy information, something future studies might explore.