Critical issues concerning the state takeover of local school districts are outlined in this paper. Three major topics are addressed: situational factors leading to intervention; the legitimacy of state power; and appropriate beneficial conditions of state takeover. The most frequent reasons for state intervention involve concerns about equity, accountability, and different effectiveness levels of schools with similar resources and populations. A discussion of the issue of state legitimacy concludes that the state has the legitimate power to intervene. However, the extent to which responsibility is part of such power is less clearly defined. Recommendations specify that future state takeovers must provide usable expertise and resources to the local schools involved, utilize multidimensional evaluations of school effectiveness, and clearly define state and local functions. Finally, because the primary reason for intervention is the protection of children's rights, cooperation is crucial. (20 references) (LMI)