High school dropouts face daunting odds of success in a labor market that increasingly rewards education and skills. This report presents very early results from a rigorous, independent evaluation of the National Guard Youth ChalleNGe Program, an intensive residential program that aims to "reclaim the lives" of young people ages 16 to 18 who have dropped out of school. ChalleNGe currently operates in more than half the states. About 75,000 young people have completed the program since the early 1990s. MDRC, a nonprofit, nonpartisan research organization, is conducting the evaluation, along with the MacArthur Foundation's Research Network on Transitions to Adulthood. The 17-month ChalleNGe program is divided into three phases: Pre-ChalleNGe, which is a two-week orientation and assessment period; a 20-week Residential Phase built around eight core components designed to promote positive youth development; and a one-year Postresidential Phase featuring a structured mentoring program. During the first two phases, participants in the program live at the program site, often on a military base. The environment is described as "quasi-military," though there are no requirements for military service. The evaluation uses a random assignment research design. Because there were more qualified applicants than slots, a lottery-like process was used to decide which applicants were admitted to the program. The young people who were admitted (the program group) are being compared over time with those who were not admitted (the control group); any significant differences that emerge between the groups can be attributed to ChalleNGe. About 3,000 young people entered the study in 10 ChalleNGe programs in 2005-2006. Early results find that the program group was much more likely than the control group to have obtained a high school diploma or a General Educational Development certificate (GED). The program group was more likely than the control group to be working and attending college; members of the control group were more likely to have returned to high school. The program group reported better health and higher levels of self-efficacy and were less likely to have been arrested. It is too early to draw any conclusions about the long-term effects of ChalleNGe. Nevertheless, the early results suggest that partway through their ChalleNGe experience, young people in the program group are better positioned to move forward in their transition to adulthood. Results from an 18-month survey will be available in late 2009. This report divides into four chapters. Following an Introduction, Chapter 2 describes the young people who are participating in the study and the ChalleNGe staff. Chapter 3, based largely on visits to the programs, describes how ChalleNGe operates in the participating sites. Sections focus on how participants are recruited and enrolled, the Pre-ChalleNGe Phase, the Residential Phase and the eight core components, and the Postresidential Phase and the mentoring program. Chapter 4 uses data from the ChalleNGe management information system to describe the extent to which program group members participated in ChalleNGe, and also draws from the nine-month survey to present some very early evidence about the program's effects on education, employment, and health outcomes. (Contains 13 tables and 4 figures.) [Additional funding for this report was provided by the MCJ Foundation. For the Executive Summary, see ED504644.]