Teaching is a stressful profession, and rates of departure are high. We examined whether teachers’ levels of psychological capital (PsyCap), a concept integrating four positive psychological resources (hope, self-efficacy, resilience, optimism), affects their job satisfaction and burnout. Israeli schools are now required to be inclusive; consequently, teachers in standard educational settings teach children with special needs, despite a lack of training. Our sample comprised 123 Israeli teachers: 56 from special education schools and 67 from standard education system. As hypothesised, higher levels of PsyCap were correlated with higher job satisfaction and lower burnout among all teachers. Also as hypothesised, there were differences in job satisfaction and burnout: special education teachers reported more job satisfaction and less burnout. Both groups had similar levels of PsyCap, thus not supporting our hypothesis. The findings suggest the need to rethink working conditions for teachers in standard education when classes are required to be inclusive. As it is possible to improve PsyCap through intervention programmes, researchers and policymakers may consider designing and testing interventions for teachers.