This report presents a comprehensive preliminary analysis of how California's Class Size Reduction (CSR) initiative has impacted student achievement during the first 2 years of implementation. The analysis is based on complete student, classroom, and teacher records from 26,126 students in 1,174 classrooms from 83 schools in 8 Southern California school districts. The evidence reviewed supports nine broad conclusions, including the following: (1) Evaluating the impact of CSR was made difficult because many other important initiatives were being simultaneously pursued; (2) rapid implementation of CSR placed substantial stresses on school facilities, created an intense demand for new teachers and encouraged a shift to year round school calendars; (3) impact from CSR is small but positive; (4) benefits of CSR experience were not evenly distributed among student groups; and (5) because class-size reduction was so deeply entangled with student, school, and teacher variables, it was impossible to disentangle the factors influencing student achievement with usual post-hoc exploratory data analysis. Recommendations include "staying the course" with class size until its full effect can be analyzed and documented; supporting work that establishes appropriate explanatory frameworks for interpreting the relationship between class size and student achievement; and continuing the search for school reform and improvement policies that can offset educational challenges created by poverty, non-English home language, and student ethnicity. (Contains 39 references.) (RT)