The purpose of this article is to illustrate how a valid and reliable state accountability system could be developed that identifies effective schools and school districts in a comprehensive, understandable, and practical way. The author presents an overview of the strategy used in the analysis, discusses the use of education production functions and the assessment of school effectiveness, and proposes a model of education production. The data and analysis processes used are described, and the empirical results are presented. The results from the presented method are contrasted with results from a "change score" approach, and conclusions and implications for school accountability policy are discussed. (Contains 6 figures, 3 tables, and 11 endnotes.)