California's approximately 500 continuation high schools are estimated to serve more than 115,000 California high school students each year--a number that approaches almost 10 percent of all high school students and as many as one of every seven high school seniors. Continuation schools are, however, more racially and ethnically concentrated than the state's traditional comprehensive high schools. Hispanic students comprise 55 percent of all students in continuation schools, and although African American enrollments in continuation schools approximate those of comprehensive schools statewide, they tend to be overrepresented in many districts. California law contemplates more intensive services and accelerated credit accrual strategies so that students who are vulnerable to dropping out of school might have a renewed opportunity to graduate from high school with a regular diploma. Based on a statewide study of these schools, however, the authors conclude that, as a whole, they are failing to provide the academic and critical support services that students need to succeed. This report comes at a watershed moment for American public education. At the federal level, policymakers are poised to reshape the federal school accountability system to promote universal college and career readiness through a new common core curricula and a renewed focus on the lowest performing schools. Likewise, here in California, legislators are considering sweeping changes to a broken school finance system and seek to recalibrate the school accountability system so that it creates stronger incentives for data-driven improvement across all schools. As well, the state legislature is considering almost 10 bills to address school discipline policies and practices that have tended to push low-income and minority students out of comprehensive schools and away from college and career-ready pathways. This ferment in public education presents both promise and peril for the alternative schools that are the subject of this report. The peril is that these schools and programs may remain an afterthought in the emerging curricular and accountability reforms. If so, this report offers a bleak prologue of what the vast majority of these schools will continue to offer those youth who find themselves falling behind but struggling to stay engaged in pursuit of a high school diploma. The promise, however, is that this moment presents a window of opportunity to fully incorporate continuation high schools, intended as second-chance pathways to the diploma, into the thinking, planning, and articulation of new accountability reforms and innovation. To this end, this report explores the role that the state, local districts and school leaders play in affecting school quality and student outcomes in continuation schools. Also examined are the roles of community nonprofit, and county or municipal social services, law enforcement, or juvenile justice agencies that come to play important roles in the lives of adolescents in these alternative schools. The authors' focus is on systemic issues (including relationships within schools and among districts and county authorities) and policy determinants of effective instruction (that is, how work and time are conceived and organized in schools). In earlier reports, their objective was to describe the schools and the challenges they face. In this report, they focus on schools that are performing well under state and federal accountability systems and reflect on what these schools can tell about promising policy and practice interventions. They tread cautiously here because for most students who are not on track to graduate due to poor grades or insufficient credits, alternative schools remain simply early exit ramps from school. But they have seen enough successful schools and students to report with confidence that despite disappointing overall results, continuation high schools can provide important opportunities and resources for a vulnerable population of youth. The "beating the odds" schools they examined also provide valuable lessons for policymakers and practitioners statewide. (Contains 34 footnotes.) [This paper was written with the assistance of Susan Bush, Martha Cortes, Hoorig Santikian, and Susan Tu. For "Raising the Bar, Building Capacity: Driving Improvement in California's Continuation High Schools. Executive Summary," see ED537703.]