In response to public demands for better-quality high school graduates and to requirements of No Child Left Behind legislation, states have developed a variety of policies such as high-stakes exit exams and diploma options. Additionally, under the Individuals with Disabilities Education Act Amendments of 1997, students with disabilities must be included in state and district assessments, further challenging states to develop policy options that allow the participation of these students. In the study that follows, all 51 states were surveyed about their diploma options, use of high-stakes tests, and participation policies for students with disabilities. Findings were compared with a 2002 survey (Johnson & Thurlow, 2003) and include the following: (1) The use of exit exams seems to be leveling off, with about 25 states using them; (2) States are experimenting with alternative diploma options, with a trend toward decreasing options such as Individualized Education Program (IEP) diplomas while increasing options such as honors diplomas; (3) A range of options exist for students who do not pass high-stakes exit exams; (4) Three options exist for scoring exams: requiring the same score from all students, permitting different passing scores for students with disabilities, and giving different tests to different groups of students; (5) The array of alternative or differentiated diploma options may or may not benefit students in relation to future opportunities for postsecondary education access and employment; and (6) Staying abreast of state policy developments continues to be a challenge for special education leaders. (Contains 4 tables.)