This article describes an experiment utilizing a research and development strategy to design and implement an innovative school for the future. The development of Cramim Elementary School was a joint effort of researchers from Tel-Aviv University and the staff of the school. The design stage involved constructing a new theoretical framework that defined school as a knowledge system, based on the state of the art, interdisciplinary study of the nature of humans, and the nature of knowledge. A new school design emerged based on this theoretical framework and the school was opened in 1995. Action research followed for 8 years and the results indicated that the school has emerged as a learning organization and successfully integrated knowledge technologies into the learning processes of both students and teachers. Differentiated teaching strategy resulted in a significant increase in achievements (+11% in maths, literacy, and science; +10% in literacy in kindergarten; persistence of higher achievement in junior high schools). The greatest beneficiaries were low-achieving students. As the school is a highly complex system, individual variables contributing to the increased effectiveness could not be isolated. The article's conclusion is that experimental schools are a productive strategy to bring about changes, but unless these schools are part and parcel of the culture of the mainstream education system culture, they are destined to remain isolated cases.