Teacher evaluation is arguably the hottest issue in education right now. Because of Race to the Top, many states and districts around the country are designing and implementing new teacher evaluation systems that--for the first time ever--evaluate teachers based on how much their students learn. However, there is limited research on how to build an evaluation system centered on classroom observations that can distinguish between effective and ineffective teaching. This report from the University of Chicago Consortium on School Research focuses on Chicago, but the lessons learned have significant applicability to districts across the country. The report is one of the first to provide research-based evidence showing that new teacher observation tools, when accompanied by thoughtful evaluation systems and professional development, can effectively measure teacher effectiveness and provide teachers with feedback on the factors that matter for improving student learning. This is especially relevant for those districts that are implementing the Charlotte Danielson Framework for Teaching, including Arkansas, Delaware, Florida, Idaho, Illinois, New Jersey, New York, South Dakota, Washington, Los Angeles, and Pittsburgh.