The purpose of this qualitative study was to explore state takeover as a school reform strategy in a small rural school district. Since 1988, more than 50 U.S. school districts in 20 states have been subject to some form of state takeover. A number of factors generally contribute to a state takeover, some of which include: poor student achievement, nepotism, financial mismanagement, corruption, influence pedaling, and political patronage. States use takeovers in an attempt to increase accountability, improve student achievement, and restore public trust. While school districts in some states have been under state control for 10 to nearly 20 years with little sign of improvement, others were able to make significant improvements within 3-5 years. This qualitative study utilizes a grounded theory, systematic design approach. This design is associated with detailed, rigorous procedures emphasizing the use of the data analysis steps of open coding, axial coding, and selective coding in order to develop a theory relating to the process being studied (Creswell, 2005). This study uses interviews, written reports, meeting minutes, and other text-based documents to explore the process of state takeover. Triangulation was used in order to corroborate the findings. Finally, the researcher tested the overall report with a small group of individuals who participated in the takeover process. These three steps insured that the findings of this study were valid, credible, and trustworthy. The findings of this study up to the point of the state takeover were, for the most part, consistent with the prior research on state takeover: a history of poor financial management, poor student achievement, and political interference. The difference in the school district examined in this study was level of cooperation and communication between state officials and the local school board. This led to a collaborative partnership between the state and the local board of education, business and community organizations, parents, and employee organizations within the school district. Professional development was determined to be the core strategy which the state used to generate change. Finally, the district's progress was monitored through a set of clear, measurable performance standards which, when met, would result in the return of local control. This study fosters a better understanding of the conditions leading to state takeover and what strategies have been effective in creating change. Through that understanding, policy makers will be able to make well-informed decisions which result in improved schools and increased student achievement. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com/en-US/products/dissertations/individuals.shtml.]