The Urban Teacher Education Program (UTEP) is a project of Indiana University Northwest (IUN) and three urban school districts (Gary, East Chicago, and Hammond, Indiana) to develop novice teachers, continue professional development among experienced professionals, and provide a forum for research on teacher education. Following discussion of the cultural differences in universities and schools, sections of the report focus on: governance of the collaborative; recruitment of students; development of Professional Development Schools (PDSs) called Professional Development Centers (PDCs) in this collaborative; cost factors; and continuing efforts to institutionalize UTEP. This collaborative has provided new teachers with expertise in urban education, in developing a collaborative environment, and in finding better ways to communicate and to understand others in spite of educational, cultural, ethnic, gender, and class differences. Most university professors and teachers who have been working in UTEP have found PDCs to be potentially better places to prepare new teachers. The report concludes with four recommendations: (1) redirect the focus of UTEP to be more school-centered; (2) create an atmosphere of mutual respect, trust, and ownership among all partners; (3) design a governance structure that is broad based; and (4) use creative means to finance the program. Nine appendices include survey and program data, a model and program descriptions, budget, agreements, and staff recommendations. (Contains 65 references.) (ND)