Noting that performance at the highest levels of achievement on the National Assessment of Educational Progress (NAEP) is evidence that students have demonstrated competency over challenging subject matter and achieved the third National Educational Goal, this report presents the most up-to-date results in reading achievement for the states and the nation from the NAEP. It presents a decade of NAEP reading data in a clear, easy-to-understand format that enables state policymakers to monitor educational progress over time; whether their students are performing as well as others; and the extent to which all groups of students in their state are achieving at high levels. It awards gold stars to seven states and one U.S. territory that increased the percentage of 4th graders who met the National Educational Goals Panel's performance standard in reading during the 1990s: Colorado, Connecticut, Kentucky, Louisiana, Maryland, Minnesota, Mississippi, and the Virgin Islands. The report also recognizes the top three states in 4th grade reading (Connecticut, New Hampshire, and Massachusetts), and in 8th grade reading (Connecticut, Maine, and Montana). It recognizes four states and one city that made greater than expected gains in reading achievement between grades 4 and 8: Arizona, California, the District of Columbia, Louisiana, and New York. After a foreword, a statement of Goal 3 and objectives, data highlights, and an introduction, the report presents two pages of information for each of the following: the United States, each state, the District of Columbia, and five U.S. territories. Appendixes contain technical notes and sources; NAEP data collection schedules; four tables of standard errors; and statistically significant differences in subgroup performance. (RS)