This report investigates how inner-city schools are performing on the academic goals and standards set by the states for children, examining district-by-district achievement data in math and reading through spring 2002. It also measures achievement gaps between cities and states, African American and Whites, and Hispanics and Whites; presents new data on language proficiency, disability, and income; and discusses progress. Data come from 59 major city school systems. Results indicate that overall, the Great City Schools are making significant gains in math scores on state assessments, there are new gains in reading, and gaps may be narrowing. More urban school districts showed math and reading gains in 2002 than in 2000. However, urban school math and reading achievement remain below national averages. Three factors that shape the urban context include: the nation cannot meet the broad goals of No Child Left Behind and raise achievement nationally without examining the significant percentage of students enrolled in urban schools; students in urban schools are more likely than other students to be African American, Hispanic American, or Asian American, to come from low income families, and to come from non-English speaking homes; and urban schools often lack adequate financial resources. (SM)