The "State Teacher Policy Yearbook" examines what is arguably the single most powerful authority over the teaching profession: state government. This North Carolina edition of the National Council on Teacher Quality's (NCTQ's) "State Teacher Policy Yearbook" is the first of what will be an annual look at the status of state policies impacting the teaching profession. It is hoped that this report will help focus attention on areas where state policymakers could make improvements to benefit both students and teachers. This policy evaluation is broken down into six areas that include a total of 27 goals. Broadly, these goals examine the impact of state policy on the preparation, certification, licensure, compensation and effectiveness of teachers across the elementary, secondary and special education spectra. North Carolina's progress toward meeting these goals is summarized. Overall, North Carolina has done a good job in meeting some of NCTQ's goals, but there is significant room for improvement in several areas. North Carolina completely missed 11 goals, met a small portion of three, partially met eight, nearly met three and fully met two. North Carolina collects and publicly reports more information about the quality of its teachers than most states. The state should also be commended for its performance pay program, which rewards teachers for differentiated roles within the school and for producing student-achievement gains. Unfortunately, it is also one of the few states that does not keep its teacher preparation program approval process separate from accreditation. North Carolina should also consider offering at least one genuine alternate route into the teaching profession and improving its preparation of special education teachers. The body of the report provides a more detailed breakdown of the state's strengths and weaknesses in each area. Detailed rationale and "Food for Thought" for each area and corresponding goal are appended. (Contains 72 figures.) [Additional funding for this first edition of the "State Teacher Policy Yearbook" was provided by the Achelis Foundation, Bodman Foundation, Daniel's Fund, Fisher Family Foundation, Gleason Foundation, and The Teaching Commission. This state report is part of NCTQ's State Teacher Policy Yearbook series. For the national summary, see ED506661.]