The Educational Testing Service is developing a new generation of teacher assessments--the Praxis Series: Professional Assessments for Beginning Teachers. The assessment series consists of three components. An academic skills component will assess the candidate's basic academic and enabling skills. Subject assessments will test the candidate's grasp of subject matter. Classroom performance assessments (Praxiss III) will assess the candidate's application of knowledge in an actual classroom setting. This document describes a series of eight formative studies that were conducted during the development of Praxis III. Research efforts were targeted in: (1) field testing the various data-collection instruments; (2) examination of the processes and strategies involved in retrieving, coding, and evaluating teacher performance data; and (3) analysis of how the performance assessment addresses issues of diversity in teaching and learning. The studies were conducted in two cities in 1991. Trained assessors working in pairs evaluated a total of 18 teacher candidates and then evaluated the assessment system. The paper highlights the major findings of each of the formative studies, discusses their implications, and describes how they led to informed changes in the Praxis III assessments. Eight appendixes present assessment instruments used in the studies. (Contains six tables and eight references.) (SLD)