By 1998-99, California's legislature-mandated class size reduction program was 92 percent implemented; those classes that had not been reduced in size were concentrated in districts serving high percentages of minority, low-income, or English-learner (EL) students. The qualifications of K-3 teachers continued to decline but at a slower rate than in the past; schools serving minority, low-income, or EL students had fewer well-qualified teachers than other schools. Teachers in reduced-size classes spent more time working individually with students during mathematics and language arts lessons, and reported less classroom disruption. There was a small positive gain in student achievement for third grade students in reduced-size classes, regardless of their background characteristics, and these positive effects persisted even after students returned to a non-reduced size class in fourth grade. The authors recommend that state policymakers (1) ensure that funding and facilities problems do not undermine the effectiveness of the program; (2) focus on improving qualifications of the teacher workforce in schools serving minority, low-income, and EL students; (3) encourage the strategic use of federal funds to address the problems identified in the report; (4) mandate improvements in the state's education data system, and (5) evaluate future school reform efforts thoroughly to ensure that California gets the most value for its investment.