The focus of the study was to identify secondary school students' difficulties with aspects of linearity and linear functions, and to assess their teachers' understanding of the nature of the difficulties experienced by their students. A cross-sectional study with 1561 Grades 8–10 students enrolled in mathematics courses from Pre-Algebra to Algebra II, and their 26 mathematics teachers was employed. All participants completed the Mini-Diagnostic Test (MDT) on aspects of linearity and linear functions, ranked the MDT problems by perceived difficulty, and commented on the nature of the difficulties. Interviews were conducted with 40 students and 20 teachers. A cluster analysis revealed the existence of two groups of students, Group 0 enrolled in courses below or at their grade level, and Group 1 enrolled in courses above their grade level. A factor analysis confirmed the importance of slope and the Cartesian connection for student understanding of linearity and linear functions. There was little variation in student performance on the MDT across grades. Student performance on the MDT increased with more advanced courses, mainly due to Group 1 student performance. The most difficult problems were those requiring identification of slope from the graph of a line. That difficulty persisted across grades, mathematics courses, and performance groups (Group 0, and 1). A comparison of student ranking of MDT problems by difficulty and their performance on the MDT, showed that students correctly identified the problems with the highest MDT mean scores as being least difficult for them. Only Group 1 students could identify some of the problems with lower MDT mean scores as being difficult. Teachers did not identify MDT problems that posed the greatest difficulty for their students. Student interviews confirmed difficulties with slope and the Cartesian connection. Teachers' descriptions of problem difficulty identified factors such as lack of familiarity with problem content or context, problem format and length. Teachers did not identify student difficulties with slope in a geometric context.