Intuitively, class size reduction is a good idea. Parents support it because it means that their children will receive more individual attention from teachers. Teachers like it for the same reason and also because it creates a more manageable workload. It is generally assumed that the fewer students in a class, the better they will learn and the higher they will score on nationwide tests--currently one of the most common measures of student achievement. Nevertheless, several things could go wrong with mandated class size reduction (CSR). This report presents evidence that the potential success or failure of such a reform may depend largely on how it is implemented and how teachers and administrators respond. If it is implemented quickly on a large scale, such a program may run into serious problems. Jepsen and Rivkin analyze some of the things that went right and some that did not after California passed its CSR law in 1996. The study finds that, overall, smaller classes have a greater positive effect on students in low-income schools: following CSR, test score gains in five of the state's six largest school districts were found to be larger than gains in school districts throughout the state as a whole. However, the pattern did not hold in Los Angeles, California's largest school district, where schools with predominantly low-income students saw lower test scores after class size reduction. The study suggests that this surprising finding could be related to CSR having exacerbated the shortage of qualified, experienced teachers in the poorest schools by increasing the number of inexperienced, uncertified teachers in the most at-risk schools as more senior teachers left to fill new openings in more affluent schools. The report is divided into five sections: (1) Introduction; (2) Elementary School Demographic Composition; (3) Trends in Teacher Characteristics during the 1990s; (4) CSR and Student Achievement; and (5) Summary and Policy Implications. The document alsoincludes a foreword (David W. Lyon), summary, lists of tables and figures, acknowledgments, references, author information and list of other Public Policy Institute of California (PPIC) publications on education. (Report includes 20 figures, 24 tables and 55 footnotes.) [Public Policy Institute of California (PPIC) Research Briefs (RBs) are two-page summaries of research reports, written in non-technical language for a lay audience. An RB describes the policy context of the research and presents the study's findings, conclusions, and policy implications. For the associated RB, see ED497306.]