This paper presents the Alabama 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. Overall, Alabama has done a good job in meeting some of the goals; however, significant room for improvement remains in several others. The state completely missed six goals, partially met five, nearly met one and fully met three. Alabama's best performances are in its effective induction for new teachers, its support of performance pay and its requirement of multiple formal evaluations for new teachers. The state has the most work to do in making tenure decisions meaningful, ensuring only factors that advance teacher effectiveness are required for permanent licenses and strengthening some policies regarding teacher compensation issues. Alabama'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. Alabama has an overall performance of C for 2008. Goals for each area are appended. (Contains 57 figures.) [Additional support was provided by The Teaching Commission. For the national report, see ED514690.]