Teacher self-efficacy (TSE) significantly influences teacher well-being and pedagogical quality, thereby impacting student learning outcomes. Despite the recognized effectiveness of Lesson Study (LS) in shaping teachers' practices and beliefs, there is a research gap in TSE, particularly in higher education. To address this, we conducted a longitudinal study at a northeastern Chinese university, tracking TSE evolution in three English as a Foreign Language (EFL) teachers, encompassing both novices and experienced educators, during a six-month LS program. We collected both quantitative and qualitative data, encompassing interviews, surveys, and observations. Underpinned by Bandura and Wyatt's self-efficacy theory, the impact of LS on teachers' TSE development was explored and interpreted. Our findings shed light on the many ways in which LS effects individual teachers' TSE. Notably, both novice and experienced teachers improved significantly in TSE, especially in the domains of instructional techniques and student engagement. However, in the context of classroom management, there was considerably less growth. Furthermore, our research identifies a number of challenges that can have a negative impact on teachers' TSE, such as adapting to students' changing needs, dealing with limited resources, managing time constraints, navigating the school examination system, and overcoming initial resistance to the LS approach.