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We use latent transition analysis (LTA) to identify a typology of teacher perceptions of school improvement capacities in all New York City schools serving students in grades 3-8 (n=1225) and reveal transitions in improvement capacity from 2017-2019. We find six school types: versatile, developing, collaborative, balkanized, controlled, and demoralized. Versatile and demoralized schools are most stable, and collaborative and controlled schools were roughly equally likely to increase or decrease capacity. Improvement capacity is associated with a number of student, school, and teacher characteristics, and some transition probabilities are further influenced by principal turnover. Both improvement capacity and transition are related to student achievement. These results have implications for researchers and practitioners concerned with better understanding and supporting school improvement.