Teacher evaluation has emerged as a potentially powerful policy lever in state and federal debates about how to improve public education. The role of student test scores and "value-added" measures in teacher evaluation has generated intense public controversy, but other approaches to evaluation including especially classroom observations of teaching are certain to remain as essential features of any evaluation system. In this policy brief Jennifer Goldstein lays out four key design principles that should guide the observation-based assessment of teaching: (1) Use standards-based instruments for data collection; (2) Rely on observers/assessors other than building administrators, ideally master teachers, to conduct observations; (3) Support observers by establishing shared responsibility and accountability for evaluations and employment decisions; and (4) Partner with the teachers union. Goldstein concludes that a robust teacher observation system can contribute to policymakers' and the public's need for accountability, while also providing a powerful tool for improving instructional practice. California already has policies in place and practices in use that can help pave the way toward successful teacher evaluation reform in our state's schools.