This report provides state policymakers with a review of current issues and challenges in the professional development of teachers. The changing role of states in professional development is examined, and it is argued that while state involvement in professional development programs has increased, inadequate attention is being paid to the quality and content of these programs. Systemic reform is then discussed, including movements to place more responsibility for curriculum, assessment, outreach, and collaboration on teachers. The purposes of professional development are explored, including the balance between teachers' desires to pursue their own professional interests and the priorities of individual schools and school systems. Current systems of professional development are seen as disconnected from classroom practice and lacking in intensity and followup. Cost benefit issues are also addressed. A set of principles and standards for professional development is presented in order to stimulate dialogue in state and district school systems. A variety of challenges in professional development are then discussed, including questions of who sets priorities, how public support for increased investment can be secured, and how to convince both teachers and parents that time must be spent outside the classroom to improve teacher competencies. Major state policy instruments are discussed, and a framework is provided for conducting reviews of state policies in this field. Promising alternative models of professional development are examined, and specific suggestions are provided for state leaders interested in improving the quality and effectiveness of teachers in their states. (Contains 70 references.) (PB)