The No Child Left Behind Act of 2001 poses unique challenges for rural schools and districts. Small schools are more likely to be labeled as needing improvement due to the volatility of annual test scores for small student populations. Rural districts are limited in their capacity to provide parents with school choice, and rural districts face greater challenges than their urban or suburban counterparts in attracting and retaining "highly qualified" teachers. The major obstacle facing rural districts is access to resources. Under current funding formulas, many rural districts do not have access to the financial resources that urban and suburban districts have. While these challenges seem daunting, they are not insurmountable. Test scores can be averaged over several years. Supplemental services can be made available through distance learning, community colleges, after-school programs, libraries, or faith-based organizations. Teachers could be offered incentives to work in less attractive locales. Teachers could be recruited among local residents. Schools can form consortia to build distance learning programs and infrastructure. However, rural schools and districts will need federal and state assistance to implement these strategies. The ability of rural schools and districts to comply with federal law will depend, in large part, on the future direction of related federal and state policies. It is essential that policymakers be made aware of the unique challenges faced by rural schools and the importance of developing policies that address those unique challenges. (Contains 26 references) (TD)