In response to the increased movement toward competency-based education, a large urban southeastern school system implemented a Pupil Progression Policy in the 1980-81 school year. This paper reports on the results of a 5-year longitudinal study of the policy's effect on the academic achievement of retained and promoted students who entered first grade the year the policy took effect. Data included school system records of California Achievement Tests (CAT) and normal curve equivalent (NCE) reading and mathematics scores. Results showed that (1) students' overall academic achievement improved over the testing period; (2) 34 percent of all students were retained one or more times; (3) promoted students obtained higher mean NCE scores than retained students; (4) the lower scores of retained students remained lower over the testing period, though some gains did occur; and (5) grade retention plus Chapter I remedial instruction resulted in academic growth. Implications of the study are that a policy which causes the retention of 34 percent of 3,313 students needs to be revised. Suggestions include making provisions for individual differences, improved preschool and kindergarten programs, and a review of pedagogical considerations. Further research needs to focus on retention's effects on students' social adjustment and self-concept. Ten tables are included. (IW)