This report from the Doing School Choice Right initiative reveals how two markedly different school districts, Milwaukee and Dayton, are confronting the challenges of competition. It explores how the two districts are affected by and respond to the pressures of school choice. Because it relies heavily on district's and school leaders' accounts of how they are coping with competition, this report is able to provide readers with some lively advice from those on the competitive frontlines. But this reliance on individual perceptions means it cannot tease out causal connections between competition and district responses. With all the appropriate caveats in mind, this analysis points toward three findings: (1) The first steps toward helping schools compete may involve districts simply recognizing that they are in a competitive environment, and taking nothing for granted; (2) Basic strategies for helping schools compete include reaching out to parents, offering new options (responding to choice with choice), and taking the oversight of existing schools very seriously; and (3) As districts try to help their schools compete, misaligned "systems"--such as finance and information systems--often get in the way. The study offers concrete advice to districts facing similar pressures and explores the barriers that can act as impediments to change. The report concludes with specific guidelines for what districts and individual schools, state policymakers, and philanthropies can do to help traditional public schools adapt successfully to the emerging competitive environment. Appended are: (1) Enrollment Decline in 26 Urban Districts, 2000-2003; (2) Principal Interview Protocol; (3) Leading Indicators of School Health; and (4) State Funding Mechanisms.