Published in January 2001, "A Teaching Profession for the 21st Century" (normally referred to in this report as the Teachers' Agreement), set out arrangements for a new salary scale and conditions of employment for teachers. From 2002 to 2006 HMIE carried out a review of the implementation of the Agreement working in partnership with Audit Scotland to share research and findings. Audit Scotland produced a report earlier this year which accounted for the spending related to the Teachers' Agreement. This report sets out the findings of the HMIE study which focused on the impact of the Teachers' Agreement on schools. The Teachers' Agreement sought to address emerging concerns about teachers' salaries and aspects of their conditions of service. These concerns were contributing to problems in recruiting high quality graduates into the profession. The evidence contained in this report confirms that the Agreement has aided recruitment and helped to provide a more constructive national educational environment. Appended are: (1) Teachers' pay scales; (2) Summary of Agreed Milestones in "A Teaching Profession for the 21st Century"; (3) List of schools visited by HMIE; (4) Teachers' duties as listed in Annex B of the Teachers' Agreement; (5) Annex E of the Teachers' Agreement; (6) Annex F of the Teachers' Agreement; (7) Tasks set out in the Teachers' Agreement as "Further Work Required"; and (8) The key recommendations of the McCrone report. (Contains 8 footnotes.)