This report describes an evaluation study of the Houston Annenberg Challenge, which was a school reform initiative designed to improve the quality of Houston's diverse urban schools by promoting an academically rich and purposeful education for all students. The study examined academic achievement, comparing Annenberg schools with other schools in the region; school development, specifically in relation to the three goals established by the initiative concerning teacher learning, school isolation, and school size; and the long-term impact of the effort in building a framework for school reform throughout the region. Information came from student achievement data; surveys of students, teachers, principals, parents, and district staff; and examination of 12 case study schools as they participated in local, regional, and national activities. Results indicate that the Houston Annenberg Challenge has served as a powerful engine for school reform in the area. Academic achievement at many of the participating schools has outpaced that at other Houston schools. Teachers at participating schools stay longer at their schools than do teachers at the state or regional level. Reforming schools have significantly reduced isolation within schools, between schools, and with the community by forming substantive partnerships. The strong accountability and peer review process has helped push the schools along the road to success. The teacher, student, principal, and parent surveys are appended. (Contains 8 figures, 41 tables, and 81 references.) (SM)