In this paper presented by the Council on Ontario Universities, quality indicators are considered in light of their relationship to the challenges Ontario's universities expect to face in the next decade. These challenges include a surge in enrollment; the need for new, first-rate faculty; and Ontario's potential role in leading innovation and research. The report makes five recommendations in the following five areas to policymakers and planners in Ontario's higher education arena regarding quality indicators and quality enhancement. First, Ontario's universities are at a critical juncture in the quality of their work, and in striving to enhance quality, they face major challenges. Second, quality refers to excellence in the work of universities. It is considered in terms of the institution, academic program or department, and the university sector. Third, quality indicators refer to evidence of characteristics associated with quality and overlap with performance indicators. Fourth, the paper looks at Ontario's specific experience with indicators at three levels. Lastly, international perspectives on quality are considered. One appendix is included. (HB)