This report discusses progress in achieving goals, general program effectiveness, and progress toward institutionalization of the Urban Teacher Education Program (UTEP) at Indiana University Northwest. This program has two major goals: (1) to change what the urban teacher knows and is able to do and (2) to significantly affect the education of children in the urban school districts of northwest Indiana. UTEP's primary components are: the professional development center (PDC) model for delivery of teacher education and the Option II model for alternative certification of urban teachers. Option II is a graduate certification program that recruits and prepares individuals who already possess an undergraduate degree. The report discusses indicators of program progress in the following areas: policy board and personnel changes, signs of institutionalization, rationale for renewing Option II, urban teacher education curriculum development, professional development activities, program evaluation, student recruitment and support (includes a brief discussion of innovative "compensation" for student teachers), PDC activities, and UTEP outreach. Fourteen attachments, which constitutes more than half the report, include summaries of program goals and staff positions and responsibilities, contact information for program staff, Option II renewal rationale statement, revised job descriptions, copies of agendas from various UTEP activities, conference programs, and several news clippings. (IAH)