This paper explores the relationship between intrinsic and extrinsic motivation in preschool teachers in the context of self-determination theory. Background: The quality of the educational institution, in whole, is largely determined by the quality of its educational staff. Research shows that education-related professions are among the most stressful and emotionally demanding, and that dissatisfaction arising from it can negatively affect the factors that determine the quality of pre-school teachers’ work. It is quite clear that the role of an educator cannot be fulfilled by a person lacking a significant factor - intrinsic motivation – which is considered from the point of view of self-determination theory, (authors Deci and Ryann). Intrinsic motivation has been contemplated through the analysis of factors and the analysis of possibilities in managing these factors that, according to the research findings, influence the level of psychological needs satisfaction and motivation. The current change that is happening in the perception of the role of a preschool teacher, from the one who follows the instructions to the one who is an independent decision-maker taking responsibility for her/his decisions, brings out the need for a change in the role of preschool director from the one who monitors and controls to the one who provides an organizational structure that promotes independence, professional training, competency and team work in a stimulating and welcoming environment. The paper considers the possibilities of application of the SDT theory in nursery and preschool institution Kindergarten Nemo, Zagreb, Croatia, by applying and practicing certain elements of transformational leadership and strategic planning. Although promoting extrinsic motivation can be useful for organizations whose primary goal is profit, for educational institutions, nurturing intrinsic motivation of employees is far more in line with the program goals and striving for a quality educational system.