Recent efforts to attract and retain effective educators and to improve teaching practices have focused on reforming evaluation and compensation systems for teachers and principals. In 2006, Congress established the Teacher Incentive Fund (TIF), which provides grants to support performance-based compensation systems for teachers and principals in high-need schools. The incentives and support offered through TIF grants aim to improve student achievement by improving educator effectiveness and the quality of the teacher workforce. The number of TIF grants funded by the U.S. Department of Education grew significantly in 2010, with 62 grants awarded that year compared to 16 grants in 2006 and 18 in 2007. As part of the additional funding used to support these grants, Congress required a rigorous evaluation of the 2010 TIF grantees. The purpose of the multiyear study is to describe the program characteristics and implementation experiences of all 2010 TIF grantees and estimate the impact of pay-for-performance bonuses within a well-implemented performance-based compensation system for evaluation grantees. Because educators' understanding of and responses to this policy can change over time, this study plans to follow the grantees for the duration of the five-year grants. This report addresses two research questions: (1) What are the characteristics of all TIF grantee districts and their performance-based compensation systems? What implementation experiences and challenges did TIF districts encounter? and (2) How do teachers and principals in schools that did or did not offer pay-for-performance bonuses compare on key dimensions, including their understanding of TIF program features, exposure to TIF-funded activities, allocation of time, and attitudes toward teaching and the TIF program? Tables and figures are appended.