In 1994, four New York City school reform organizations joined to form the New York Networks for School Renewal (NYNSR) and received the first Annenberg Challenge urban grant. This midterm report describes NYNSR's progress so far. The first two sections present NYNSR goals and how those goals have been met in the first 3 years. The core premise, that small schools are a successful strategy for public school reform, has been validated by the fact that NYNSR now includes 140 small public schools serving more than 50,000 students. These schools include more African-American, Latino, and poor students than other public schools, and the college acceptance rate of their students exceeds that in the rest of the city. In addition, NYNSR has created school networks, advanced the concept of a Learning Zone, influenced city and state reform initiatives, broadened support for education reform, and increased funding to public education. Subsequent sections cover broadening the school community; building the technology of NYNSR schools; building school networks for support and accountability; achieving systemic reform through increased school autonomy; expanding successful reform strategies related to student learning, school leadership, and professional development; evaluation and accountability; and matching the funding goals of the Annenberg Challenge. The goals for the last 2 years of the project and beyond are discussed. The last section lists project partners, consultative council members, and central staff. Profiles of schools and school networks provide examples in each section. (TD)