The Department of Education (Education) created Race To the Top (RTT) under the American Recovery and Reinvestment Act of 2009. From 2010 through 2011, Education awarded $4 billion in competitive grant funds to 19 states to reform core areas of K-12 education. RTT states also committed to building capacity to implement and sustain reforms. GAO and others previously reported that capacity challenges had adversely affected RTT implementation and could hinder efforts to sustain the reforms. GAO was asked to further examine these challenges. This report examines: (1) the effect of RTT on reform and capacity challenges states and districts faced, (2) how helpful Education's assistance was to states in building and sustaining capacity, and (3) lessons learned that could inform future reform efforts. GAO surveyed all 19 RTT states and a generalizable sample of RTT districts; held an expert panel; reviewed RTT applications, progress reports, relevant federal laws and regulations, and literature; and interviewed officials from seven selected states and districts, chosen based on survey responses. GAO selected expert panelists based on research or experience with RTT, capacity issues, and federal grants. GAO recommends that Education incorporate into its coordinated policies technical assistance grantees found most useful, target assistance to rural districts, and issue guidance to help states and auditors with funding flexibilities. Education did not explicitly agree or disagree with GAO's recommendations, but outlined steps to address many aspects of them. The following are appended: (1) Objectives, Scope, and Methodology; (2) Race to the Top (RTT) Grant Awards by Phase; (3) Race to the Top State Selection Criteria; (4) Capacity Challenges by Race to the Top Reform Area and Type of Capacity, as Reported by States and Estimated by Districts; (5) List of Participants on GAO's Panel on Implications of Race to the Top Capacity Challenges; (6) Comments from the U.S. Department of Education; (7) GAO Contact and Staff Acknowledgments. [In addition to GAO contact Jacqueline M. Nowicki, Elizabeth Morrison (Assistant Director), Jamila Jones Kennedy (Analyst-in-Charge), Sheranda Campbell, Kathryn O'Dea Lamas, Amanda Parker, and Stacy Spence made significant contributions to this report. Assistance, expertise, and guidance were provided by David Chrisinger, Nancy Donovan, Alexander Galuten, Catherine Hurley, Jill Lacey, Jean McSween, Mark Ramage, Walter Vance, and Mimi Nguyen.]