"Læreren underviser i skolen."
Translation:The teacher teaches in the school.
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I'm not exactly sure. Some people might say it formally, but to me it would sound like the teacher was teaching by (next to) the school.
I would say:
Læreren underviser på skolen (a specific school)
Læreren underviser i folkeskolen (he teaches in the public school system)
Læreren underviser på gymnasiet (a specific secondary school)
Læreren underviser i gymnasiet (he is a secondary school teacher)
Lektoren underviser på universitet.
You could use ved to describe a job title:
Han er lærer ved/på Xxxx Skole
Hun er lektor ved/på Københavns Universitet
But again, I'm not sure if academics/teachers use a different terminology.