In this second annual report we summarize the progress in the second-year period of Department of Energy contract DE-FC26-01NT41203, entitled ''High- Efficiency Nitride-Based Solid-State Lighting''. The two teams, from the University of California at Santa Barbara (Principle Investigator: Dr. Shuji Nakamura) and Rensselaer Polytechnic Institute (led by Dr. N. Narendran), are pursuing the goals of this contract from thin film growth, characterization, and packaging standpoints. The UCSB team has recently made significant progress in the development of light-emitting diodes (LEDs) with AlGaN active regions emitting in the ultraviolet (UV), resonant-cavity LEDs (RCLEDs), as well as lateral epitaxial overgrowth (LEO) techniques to obtain large-area non-polar GaN films with low average dislocation density. The Rensselaer team has benchmarked the performance of commercially available LED systems and has also conducted efforts to develop an optimized RCLED packaging scheme, including development of advanced epoxy encapsulant chemistries.