The first of the National Education Goals states that by the year 2000 all children in America will start school ready to learn. Pressed by demands for greater accountability and enhanced educational performance, states are developing standards and creating new criteria and approaches for assessing achievement. Calls to assess young children are also increasing. This booklet indicates how best to craft such assessments in light of young children's unique development, recent abuses of testing, and the legitimate demands for clear and useful information. Following a look at recent assessment issues and the current assessment climate, the booklet lists general principles that should guide both policies and practices for the assessment of young children; these principles address benefits, reliability and validity, appropriateness to age level and language, and parental role in assessment. The booklet then details important purposes of assessment for young children: (1) promoting children's learning and development; (2) identifying children for health and special services; (3) monitoring trends and evaluating programs and services; and (4) assessing academic achievement to hold individual students, teachers, and schools accountable. For each purpose, the definition, audience, technical requirements and age continuum are listed. Recommendations for policymakers are also presented for each purpose, and a chart outlining appropriate uses and technical accuracy of assessments change across the early childhood age continuum is included. The booklet then considers combinations of these purposes that have most often occurred in practice. Contains 33 references. (HTH)