This seventh annual report examines the status of the teaching profession in California. These reports are meant to provide California policymakers with objective and timely data on the state's teacher workforce. Chapter 1 reviews student achievement trends in the state and then provides an overview of federal and state policies, including highlights from this year's budget and legislation. Chapter 2 examines current trends in the supply, demand, and distribution of teachers. Chapter 3 provides details on the impact of recent policy changes on the teacher development system, and Chapter 4 highlights themes that emerge from the new policies and programs and assesses the adequacy of the state's efforts. Chapter 5 provides recommendations for next steps to ensure that the state continues to build on the efforts begun this year. Appended are: (1) Source and Technical Information for Selected Exhibits; and (2) NCLB Compliant and Noncompliant California Credentials. [For the 2004 edition of this report, see ED483256.] (Contains 49 exhibits and 23 footnotes.)