This is the first report on physical education (PE) since its implementation as a National Curriculum foundation subject. In Key Stages 1 and 2 HMI found that in about two-thirds of the lessons the standards the pupils achieved were satisfactory or better. There were no significant differences in standards between the two key stages. Many class teachers lacked knowledge and expertise in teaching physical education: they needed more effective guidance to help improve the quality of their teaching. In Key Stage 3 standards of achievement were satisfactory or better in 70 per cent of the lessons.