One of the most important provisions of the No Child Left Behind Act (NCLB) is the requirement that all teachers of core academic subjects be "highly qualified" by the end of school year 2005-2006. Key principles for recruiting and preparing future teachers have been identified as raising academic standards for teachers and lowering barriers that keep many people out of the teaching profession. This publication provides a progress report and builds on last year's report to suggest specific reforms that have demonstrated promise in boosting teacher quality and meeting the requirements of NCLB. Chapter 1, "The Quest for Highly Qualified Teachers Challenge: A Progress Report," provides an overview of the highly qualified teachers challenge and highlights overall progress towards implementation of policies developed to place a highly qualified teacher in every classroom. Chapter 2, "Promising Innovations to Meet the Highly Qualified Teachers Challenge," discusses specific examples of promising reforms and initiatives that focus on either improving traditional teacher preparation programs, or on alternatives to the traditional certification system. It is noted that alternative systems indicate promise, but further research is required to solidly demonstrate their effectiveness. Chapter 3, "Continuing the Critical Work of Teacher Quality Reform," underscores that the issue of teacher quality is so important that no single proposal will work for every situation and no single entity has the capability to address the entire project: a partnership between local, state and federal levels offers the best chance of delivering the collective benefits that come from giving all students the highly qualified teachers they deserve and need for future success. Appended are: (1) Scientifically Based Research on Teacher Quality: Research on Teacher Preparation and Professional Development; (2) Overview of the No Child Left Behind Act, Public Law 107-110, Section 910; (3) Issues in Implementing Title II Requirements for Data Collection and Reporting; and (4) Data Tables. (Contains 9 footnotes, 13 figures, and 8 tables.)