This paper presents the Arizona edition of the National Council on Teacher Quality's 2008 "State Teacher Policy Yearbook". The 2008 "Yearbook" focuses on how state policies impact the retention of effective new teachers. This policy evaluation is broken down into three areas that encompass 15 goals. Broadly, these goals examine the impact of state policy on 1) identifying effective teachers, 2) retaining those deemed effective and 3) exiting those deemed ineffective. While Arizona is making progress toward meeting some goals, significant room for improvement remains in many others. The state completely missed six goals, met a small portion of four, partially met three, nearly met one and fully met one. Arizona's best performance is in its support of performance pay. The state has the most work to do in making tenure decisions meaningful, ensuring its pension system is neutral, closing loopholes that allow teachers who have not met licensure requirements to continue teaching and strengthening some policies regarding teacher compensation. Arizona's progress toward meeting these goals is summarized. The body of the report provides a more detailed breakdown of the state's strengths and weaknesses in each area. Arizona has an overall performance of D for 2008. Goals for each area are appended. (Contains 57 figures.) [Additional support was provided by The Teaching Commission. For the national summary, see ED514690.]