A case study analyzed Connecticut's state-level and district-level policies and practices related to its high level of reading achievement. Data from the National Assessment of Educational Progress (NAEP) and Connecticut's statewide test were analyzed; state and local policies were identified through interviews. Results indicated: on the 1998 NAEP, Connecticut reading achievement is the highest and, since 1992, the most improved in the country; and state education policies and local policies and practices are associated with the state's continuing improvement. Educators in the communities that made the most improvement on the state test reported they were helped by three state policies: (1) detailed information on student performance was used to monitor performance and improve instruction; (2) additional resources were provided to the state's neediest districts; and (3) an infrastructure was in place to encourage quality teaching. Local policies in districts showing greatest improvement included providing special analyses of state test results; providing extra time for reading; and making available professional development time. Classroom teaching approaches used in the most improved districts include instruction in phonemic awareness; use of different kinds of reading materials for varying instructional needs; a balance of word attack skills and comprehension; reciprocal reinforcement of reading, writing, and spelling; and early identification of students with delayed reading skills and provision of intensive interventions. Contains 22 notes and 31 references, and 12 tables and 9 figures of data. Appendixes contain a list of persons interviewed; state-level policies enacted between 1996 and 1999; a sample Degrees of Power reading passage; a sample parent report for Degrees of Power Test with recommended books and activities; and a core curriculum for teacher candidates. (RS)