This report, the second in a series published by the National Council on Teacher Quality, examines states' progress in meeting the new federal requirement that by the end of the 2005-2006 school year there will be a "highly qualified teacher" in every classroom in the nation. This new requirement has led to some discomfort in more than a few states. No longer are states able to decide independently what constitutes a qualified teacher; they must also consider a federally imposed standard that addresses the teacher's knowledge of subject matter. In this context, No Child Left Behind has cast a shadow over the integrity and value of the states' teacher certification systems. States are now required to separately assess teachers' subject-matter knowledge, a process viewed by many as an unwanted diversion from long-standing and well-tended certification systems. This report examines what states are requiring of their practicing teachers in order to comply with the law. As most current teachers were certified before No Child Left Behind was enacted, states must retrofit their old definitions of teacher quality to the federal law's new expectations, to ensure that all classrooms--not just the classrooms of new teachers--are staffed with highly qualified teachers. Three appendices are included: (1) Computation of State Grades; (2) Options provided by states for achieving highly qualified status; and (3) Principles and Indicators for Grading the States. (Contains 5 tables and 13 footnotes.)