Character includes the emotional, intellectual and moral qualities of a person or group as the demonstration of these qualities in prosocial behavior. Character education is an inclusive term encompassing all aspects of how schools, related social institutions and parents can support the positive character development of children and adults. Character education teaches the habits of thought and deed that help people live and work together as families, friends, neighbors, communities and nations. The results presented in this report are the lessons learned as educators, parents and communities implemented character education in schools across the states. Knowing what the states did during the Pilot Project to support implementation efforts provides important background as additional state education agencies (SEAs) and local education agencies (LEAs) go forward with the Department's current support for character education. What emerged from this process was evidence of a high degree of agreement among the projects--not only on what they tried to do, but how they tried to accomplish it, and what impact it had. For example, every project used professional development of staff as an essential means to achieving the goals of the project. This report provides: (1) background information regarding the importance of character education in schools; (2) key findings and trends as reported by the state pilot projects, including goals, successful practices and challenges; and (3) recommendations based on the reports from the states. The State Roll Call section provides a state-by-state summary of each pilot project, which often provides details about specific challenges or effective program components. Finally, the appendix displays an analysis of the data reported in a series of illustrations that include project goals, type of project strategy, program approaches, type of project focus, successful implementation factors, type of data collection, materials or resources developed, and sustainability factors. Appended are: (A) Analysis of State Pilot Project Information; and (B) U.S. Department of Education Additional Resources Related to Character Education. (Contains 8 exhibits and 1 table.)