A systematic approach for assessing language competencies of bilingual students is developed. Two issues are clarified. First, the issue of examining separately the four language skills is looked at, as well as the need to consider other related factors including cognitive functions operative in language processing, affective forces, and physiological and sociological factors. The second issue is the need to identify appropriate norm or criterion-referenced tests. In addition to the issues, the concepts of communicative competence and language dominance are clarified. Finally, guidelines are proposed for language proficiency screening and diagnostic assessment of bilingual students. These guidelines describe a multi-step process, involving the following steps: (1) a recommended screening process, (2) a diagnostic procedure, (3) identification and training of responsible personnel, (4) determination of requisite skills in first and second languages for academic achievement, (5) selecting skills from the four language areas to be assessed, (6) delineation of objectives for testing, (7) determination of testing philosophy, (8) specification of test selection criteria, and (9) selection of test instruments and designation of student evaluation procedure. Numerous charts and tables illustrate the essay. (AMH)