The Texas Education Agency instigated the teacher appraisal system to determine decisions concerning the career ladder, contract renewals, and staff development. In fall 1984, the agency staff researched teacher evaluation through a literature review and through interviews with administrators from 156 school districts. This research dictated the indicators and criteria for the system. An advisory committee scrutinized the work. A survey in spring 1985 validated the content of the system. In September 1985, the State Board of Education examined the draft materials, advised on revisions, and authorized an examination of the draft proposal. A pilot study was authorized in October, involving six school districts from 1985 to 1986. In March, the state board improved the pilot system, reported the results of a bias review and a teacher questionnaire, and rejected the replacement of the state appraisal instrument with local instruments. Forty educators were trained to train local appraisers in April 1986. In fall 1986, the agency staff conducted a study to determine the adequacy of the teacher appraisal instrument. In February 1987, the state board authorized a revision review panel to examine field research and recommend changes in the system. Anticipated April revisions in the system necessitate more data analysis. A selected bibliography, 10 tables, and 5 attachments are included. (RG)