Several hundred of the nation's lowest-performing schools have recently undergone major changes in leadership and teaching staff to comply with federal requirements for using school improvement grants (SIGs) financed by the American Recovery and Reinvestment Act of 2009 (ARRA). In particular, schools that receive stimulus-funded SIG awards must choose one of four improvement models aimed at turning around or closing chronically low-achieving schools. The two most popular models--"transformation" and "turnaround"--require schools to replace their principal, among other specific reforms. The turnaround model also requires schools to replace half or more of their teaching staff. Although a SIG award brings substantial extra funding for school reform, it does not guarantee that districts and schools can find principals and teachers with the necessary expertise who are willing to work in the lowest-performing schools. Although many states and school districts are optimistic overall about the reforms being carried out with SIG money, replacing principals and staff is often their greatest challenge to implementation, according to recent research by the Center on Education Policy (CEP) at George Washington University. This special report by CEP describes findings about principal and teacher replacement drawn from two CEP studies of SIG implementation in school year 2010-11 and the fall and winter of 2011-12. The first study was a survey of state education officials in 46 responding states, including the District of Columbia, and the second consisted of in-depth case studies of state and local implementation in Idaho, Maryland, and Michigan. The following key findings highlight the main challenges and experiences of states, districts, and schools, including both SIG schools and comparable non-recipient schools, that have implemented principal and staff replacement as part of their efforts to improve achievement: (1) The majority of state officials surveyed viewed principal and teacher replacement as at least somewhat critical to improving student achievement in SIG-funded schools, although several said its importance varied from school to school; (2) Finding and keeping highly effective principals and teachers has been a major challenge for SIG schools in Idaho, Maryland, and Michigan; (3) Legal and union requirements and short funding timelines have posed obstacles to restaffing in some SIG schools; (4) A minority of states surveyed are assisting SIG-funded districts and schools with principal and staff replacement; and (5) Some officials interviewed would like to see more flexibility in the SIG principal and staff replacement requirements. (Contains 1 table and 2 boxes.) [For related reports, see "Increased Learning Time under Stimulus-Funded School Improvement Grants: High Hopes, Varied Implementation" (ED533562) and "Changing the School Climate Is the First Step to Reform in Many Schools with Federal Improvement Grants" (ED533561).]