Addressing professional and popular concern about identifying and adequately rewarding excellent teachers, the authors describe a proposal for selecting master/mentor teachers and utilizing them in demonstration schools. There are six specific elements that should make any master teacher proposal realistic and educationally and economically defensible: (1) initial planning; (2) indepth preparation and training; (3) documentation of skills as a basis for ultimate selection; (4) significant school district support; (5) major inservice focus; and (6) constant evaluation. A proposal which includes those characteristics is aimed at improving the quality of teaching as well as rewarding excellence in teaching beyond what currently exists. The Kentucky plan, like those in North Carolina and Tennessee, includes a career ladder. However, it differs from other plans in that it also incorporates the notion of demonstration schools and classrooms, staffed by master teachers who take major responsibility for the inservice education of other teachers in the school district. In this description of the proposal, discussion centers on the major elements of the plan--demonstration schools; and a career ladder involving master/mentor, master teacher, and master teacher candidate roles; internships; criteria for selection; and continued evaluation. Included with the proposal are 45 criteria for master and master/mentor teacher selection; 2 figures depicting program progression; and a table of 14 roles and functions of master and master/mentor teachers. (JMK)