Many states have responded to teacher shortages by granting certification to individuals traditionally prepared out-of-state; now, out-of-state prepared teachers comprise a sizable percentage of the teacher workforce in many states. We know little about these teachers, and therefore, in the present study, we estimate the effectiveness of out-of-state prepared teachers in North Carolina elementary schools. We find that out-of-state prepared teachers are significantly less effective than in-state prepared and alternative entry teachers; however, there is a substantial overlap in the distributions of effectiveness across groups. Upon testing hypotheses to explain these findings, results indicate that differences in human capital help explain out-of-state prepared teachers' underperformance and suggest the utility of research evidence to inform state policy and local hiring decisions.