This document examines one important means of achieving accountability in a state's education system: the introduction of statewide education indicator systems, monitoring such aspects as the performance of students and the various factors affecting that performance. This report is divided into three sections. The first section describes the genesis of education indicator systems and discusses important definitions and necessary components at both state and local levels. The section provides vignettes of state education indicator systems in four states: Connecticut, South Carolina, New York, and California. The examples of state practices point to areas of concern that must be given attention as indicator systems are developed. The third section presents conclusions and recommendations that focus on multistate or national tendencies. The section closes with five necessary steps that must be taken if state indicator systems are to become useful policy tools at both state and local levels. (25 references) (SI)