Professional development schools provide mutual benefit to schools and universities. Because they are a relatively new iteration of the school/university relationship, there is a need for careful documentation and study of their development. This paper describes the beginning stages of a professional development school project that had the dual purpose of restructuring a university teacher education program and developing professional development schools. It took place in the context of a large urban school system that was undergoing major reform. The study examined schools' readiness for becoming professional development school sites. Readiness was determined using an analytic framework developed by Hyde, Koerner, and Daly-Lewis (1991), which found that schools' readiness for collaborative professional development can be depicted on a development continuum of three school-based factors: staff development, decision making, and leadership and vision. Through interviews and relationship-building activities, data showed the analytic framework to be useful in understanding readiness of schools to enter into a professional development school relationship. Data on the three readiness factors and their characteristics, as well as resources are discussed. (Contains 16 references.) (Author/RR)