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This report reviews and assesses educational transformation in South Africa since the system of apartheid ceased with the elections of 1994. Educational reform has been a major goal of the reconstruction and development undertaken since then. Reform required the building of an educational system based on equality and social justice and the establishment of a system of lifelong learning to respond to the significant economic and social challenges of the 21st century. This report describes the South African Government’s progress towards these goals in the first seven years of post-apartheid rule. The first section reviews the key shifts in policy and practice during this period. The key elements of systemic transformation and progress in transforming learning and teaching are examined in the following sections. An overview of innovation and change in the higher education system is provided. Issues of HIV/AIDS and education are examined. The final section reflects on the challenges still to be faced. The ultimate goal is to ensure that South Africans acquire the knowledge, values and skills to facilitate social and personal development, economic growth, and the strengthening of democracy, the people and the nation.