Several years after the passage of NCLB, there are persistently low-performing schools in every state that face increasingly strong consequences for failing to improve student achievement sufficiently. Schools failing to make AYP for five consecutive years must engage in restructuring to improve student learning. Districts have several options for restructuring these schools. Although constrained to choose an option that is consistent with existing state law, districts can: (1) Reopen the school as a public charter school; (2) Replace "all or most of the school staff (which may include the principal) who are relevant to the failure to make adequate yearly progress;" (3) Contract with "an outside entity, such as a private management company, with a demonstrated record of effectiveness, to operate the school; (4) Turn the "operation of the school over to the state educational agency, if permitted under State law and agreed to by the State;" and (5) Engage in another form of major restructuring that makes fundamental reforms, "such as significant changes in the school's staffing and governance, to improve student academic achievement in the school and that has substantial promise of enabling the school to make adequate yearly progress." (No Child Left Behind Act, 2002) The "What Works When" series is designed to help district leaders understand what is known about when and under what circumstances each of these options works to improve student learning. This paper focuses on the third restructuring option, contracting with an outside entity to operate the school, which this paper calls "contracting." This paper examines what is known when contracting may work for districts grappling with individual low-performing schools. The contents are organized as follows: (1) Methodology; (2) What Is Contracting Under NCLB?; (3) What Is the Experience With Contracting?; (4) What Do We Know From These Experiences? Key Success Factors and Key Challenges; (5) What Further Research Is Needed to Understand Contracting?; and (6) Conclusion. [For the related report, "School Restructuring Under No Child Left Behind: What Works When? A Guide for Education Leaders," see ED496104. This work was originally produced in whole or in part by the North Central Regional Educational Laboratory[R] (NCREL[R]) with funds from the Institute of Education Sciences (IES), U.S. Department of Education.]