This article presents the elements of the Observation and Assessment section of the Infant Care Path for Physical Therapy in the Neonatal Intensive Care Unit (NICU). The types of physical therapy assessments presented in this path are evidence-based and the suggested timing of these assessments is primarily based on practice knowledge from expert therapists, with supporting evidence cited. Assessment in the NICU begins with a thorough review of the health care record. Assessment proceeds by using the least invasive methods of gathering the behavioral, developmental, physiologic, and musculoskeletal information needed to implement a physical therapy plan of care. As the neonate matures and can better tolerate handling, assessment methods include lengthier standardized tests with the psychometric properties needed for informing diagnosis and intervention planning. Standardized tests and measures for screening, diagnosis, and developmental assessment are appraised and special considerations for assessment of neonates in the NICU are discussed. (Contains 1 table and 9 figures.)