In 1990 the Kentucky General Assembly passed one of the most comprehensive and innovative reform laws in the nation, the Kentucky Education Reform Act (KERA). Under this law, schools must meet state-defined goals to receive financial rewards. This paper presents findings of a 6-year, field-work study of education reform in four rural Kentucky school districts. Methods included interviews, observation, and document review. The data indicate that the reform effort has achieved and maintained momentum; funding for education has increased and become more equalized; instructional and curricular change has occurred; educators and parents report that students have become better writers and thinkers; family resource/youth services centers have met many student and family needs; and decision making has devolved to the school level. However, several critical issues remain. The state testing and accountability programs are not well accepted; finding time for reform is difficult; the primary program has not been implemented as intended; many educators and parents perceive that students are missing out on basic skills; and the emphasis on parent involvement at the local level has decreased. (Contains 25 references). (LMI)