This report marks a midpoint in the Annenberg $500 million challenge to improve public schools. It comes at a time when evidence from the Annenberg Challenge's first projects has started to accumulate--and to suggest that the program is indeed having a beneficial impact on students, schools, and communities. This report also furnishes early lessons that have much to tell about effective school reform. In preparing this report, the Challenge's national office drew upon the findings of the independent research teams that evaluate each project. As an interim report, this one captures work in progress. The Annenberg Foundation sequenced its grant awards so that the work of the first could inform those that followed. Even the six oldest Challenge projects featured in this report (New York City, Los Angeles, Chicago, Philadelphia, the San Francisco Bay Area, and a national consortium of rural sites), therefore, stand at different stages of development, as do the local evaluations that chart their progress. Appendices provide additional information concerning principal investigators of Annenberg Challenge Research Teams, Challenge Site Evaluation Reports, and additional data concerning grants. (DFR)