Teachers in Denver recently approved a historic revision to the teachers' contract, in which compensation is linked, in part, to student success in the classroom. If voters fund the proposed contract in fall 2005, it could mark a new era in which teachers and communities formally accept a range of indicators that can be used to determine the compensation of individual teachers. Denver's Pay for Performance pilot, from which the new contract plan emerged, was jointly run by the district and the teacher association, supported by the business and philanthropic communities, seriously implemented (though not without problems), and thoughtfully reviewed. It forced significant improvements in the way the district does business--improvements demonstrated both in aggregate student achievement and in the opinions of participants--and led to the formation of a joint task force to develop a new plan for teacher compensation. The recently accepted plan is not a test-driven pay for performance plan, based on the experience of the pilot. Instead, it takes into account both successful teaching and service to the school community, an approach that entails a much broader assessment of performance than was piloted. It addresses problems identified through the pilot as well as long-standing issues and concerns felt in Denver and many other communities.