The purpose of this research paper is to identify and examine legal issues and implications of mandatory competency tests (MCT) for high school graduation. The major data source for this investigation was actual court cases and abstracts and interpretations of court cases. It is not the purpose of this paper to perform a general review of competency testing and articles written about it; but to confine the study to the legal aspects of the issue, staying as close as possible to actual case law and interpretations. This paper commences with a section reviewing the legal context in which education is practiced, delineating the right and responsibility of the state to educate and to evaluate student performance. Following that initial section, subsequent sections examine the following specific legal issues involved in the MCT movement: racial discrimination, timing, testing the handicapped, fairness of the test, educational malpractice, and the corrolary issue of employment testing. The final section of this paper draws conclusions concerning the legal implications of MCT as a requirement for the high school diploma. (BW)