This report describes the findings from Phase II of a study of Maine's implementation of a proficiency-based diploma system. At the request of the Joint Standing Committee on Education and Cultural Affairs of the Maine Legislature, the Maine Policy Research Institute (MEPRI) has conducted a two-phased study of the implementation of Maine law "LD 1422: An Act to Prepare Maine People for the Future Economy." Phase I of the study in 2012-2013 reported on the preliminary development, costs and impacts of standards-based school programs in Maine. Phase II of the study focused on examining school districts in Maine implementing a proficiency-based diploma system. Eight Maine school districts, representing different school district sizes, geographic areas, and years of implementing proficiency-based reforms were examined through site visits, interviews, and focus groups. Implementing a proficiency-based diploma system by 2018 represents a sea change in the way education is provided for Maine children. The evidence from both phases of this study indicated that many school districts are working diligently to fulfill the state mandate. In so doing school districts are seeing some key benefits from this work. At the same time, school districts are facing some key challenges in completing this work. Each of these key benefits and challenges are described in the report, along with a series of recommendations to facilitate future work in implementing Maine's proficiency-based diploma system. The report includes the appendix: LD 1422. [This study was funded by the Maine State Legislature, and the University of Maine System. For "Implementation of a Proficiency-Based Diploma System: Phase I--Early Experiences in Maine," see ED561261.]