This paper examines Japan's current educational reform and discusses its impact on student learning. Section 1 describes the main features of the reform efforts, which focus on choice, diversity, flexibility, competition, and excellence in education. Section 2 looks at Japan's changing system of teacher education, noting the dropping rates of teacher employment and the resulting cuts in preservice student enrollments and reductions in numbers of teacher educators. Citizens are demanding quality education but criticizing schools and teachers in their inability to cope with problematic behaviors in schools. As a result, the government has declared that all preservice teachers must take a course in psychological counseling. In 1998 the Ministry of Education decided to revise the teacher certification system. The change is designed to be incremental and melioristic, though many teachers consider it dramatic. Japan's teacher education system is cognitively oriented and knowledge centered. The educational reform is working to upgrade the quality of inservice education, and more graduate programs are being developed. Section 3 discusses the impact of inquiry-based learning on student learning, noting the effect of adding inquiry-based learning into the curriculum. It examines the importance of colleges and universities playing a major role in the reconstruction of elementary and secondary education. The paper notes that Japan's ongoing educational reform will be strongly influenced by U.S. education. (Contains 25 references.) (SM)