A study, conducted in a basic educational psychology course which serves as a gateway course to a teacher education program at Michigan State University, focused on the development of new knowledge while it taught about the educational research process and the subject being studied. A new format for objective testing, alternate-choice questions, was studied. Specific study project goals were to: (1) study the usefulness of a novel test-item format to evaluate student achievement; (2) increase the reliability and validity of the course's unit examinations and final examinations; (3) collect information useful in evaluating course effectiveness, student learning, and teacher performance; (4) facilitate student learning of practical and sound measurement theory and techniques through investigation of an important measurement question; and (5) model the spirit of inquiry, impressing on preservice teachers the importance and value of experimentation with new techniques and the necessity of continuous evaluation of both new and well-accepted practices. Study results showed that Alternate Choice (AC) items were slightly less difficult, discriminating, and reliable than Multiple Choice (MC) items; that students were able to respond to twice as many AC as MC items in a given time; and that students viewed the course testing positively. (JMK)