Educational leaders are developing standards to specify what students should know and be able to achieve in key subject areas. This document examines an important challenge of standards-based reform--that of creating a process to develop standards. Information is based on studies conducted by the Consortium for Policy Research in Education (CPRE) of standard-setting processes in five states--Vermont, Kentucky, New York, California, and South Carolina--and three national curriculum standards projects. Several practical suggestions for the process of standard-setting emerge. Standards efforts should: (1) survey each content area before setting standards; (2) develop iterative processes for including professional and public participation; (3) construct reasonable timetables for completion of standards; (4) consider the use of multiple formats for various subject areas; (5) develop activities to bridge disciplines; (6) seek to remain flexible while developing standards that are specific enough to provide meaningful guidance; (7) anticipate and address controversy; and (8) support continued capacity building and plan for revision over time. It is also important to achieve balance without sacrificing values and to deal with controversies that accompany the standard-setting process. Information on other CPRE publications is provided. (LMI)