Tennessee’s charter schools are public schools that are part of the state's program of public education.  A charter school may be formed by creating a new school or by converting an eligible existing public school.  Charter schools are operated by independent, non-profit governing bodies.  Chartering authorities authorize, monitor, and, when necessary, revoke or non-renew charter schools that fail to meet high academic and fiscal standards. In exchange for the opportunity to meet these standards, charter school operators are given greater autonomy to make decisions at the school level.  Charter schools are governed by the Tennessee Public Charter Schools Act of 2002, T.C.A. § 49-13-101 et seq.  The state department of education provides information on its website on how a public charter school is organized and operated.

Charter schools are entitled to receive 100 percent of the per-pupil expenditure allocated in the LEA and may also be funded by grants, gifts and donations.  Pupil transportation may be provided at the election of the charter school, and if transportation is provided the LEA must provide the charter school with all funds the LEA would have spent to provide transportation to those students.  Each LEA must include as part of its budget the per pupil amount of local money it will pass through to charter schools within the LEA during the school year.