This article describes the development and validation of a diagnostic test of German and its integration in a programme of formative assessment during a one-year initial teacher-training course. The test focuses on linguistic aspects that cause difficulty for trainee teachers of German as a foreign language and assesses implicit and explicit grammatical knowledge as well as students' confidence in this knowledge. Administration of the test to 57 German speakers in four groups (first-year undergraduates, fourth-year undergraduates, postgraduate trainees, and native speakers) provided evidence of its reliability and validity.