Principals play a vital and multifaceted role in setting the direction for schools that are positive and productive workplaces for teachers and vibrant learning environments for children, but existing knowledge on the best ways to develop these effective leaders is insufficient. The need to identify and replicate effective pre- and inservice programs and program structures that produce the most highly qualified school leaders has motivated a major research study commissioned by The Wallace Foundation and undertaken by the Stanford Educational Leadership Institute in conjunction with The Finance Project. This study--"School Leadership Study: Developing Successful Principals"--conducts a series of in-depth case analyses of eight highly developed pre- and inservice program models in five states, and tracks the graduates into the schools they lead. The study not only examines the conduct of the programs and the perceptions of participants, but it also interviews and surveys graduates--along with a comparison sample of principals--about their preparedness and practices. The study also follows a sub-sample of program participants into their schools, examining school operations, teachers' views of the school leadership, and trends in student performance. Cost analysis of case studies is conducted by The Finance Project, a Washington, DC-based, nonprofit research organization. The Finance Project also explores the state policy and finance structures that foster effective programs. To launch the study, this review of existing research and literature has been conducted. Following are the key findings of the review: (1) Essential Elements of Good Leadership; (2) Effective Program Design; (3) Multiple Pathways to High Quality Leadership Development; and (4) Policy Reform and Finances. [This paper was commissioned The Wallace Foundation. For Case Study Summaries, "Preparing School Leaders for a Changing World: Case Studies of Exemplary Programs. School Leadership Study. Case Study Summaries," see ED533008. For Final Report, "Preparing School Leaders for a Changing World: Lessons from Exemplary Leadership Development Programs. School Leadership Study. Final Report," see ED533003.]