Out-of-level testing refers to the practice of assessing a student with a test that is intended for students at a higher or lower grade level. Although the appropriateness of out-of-level testing for accountability purposes has been questioned by educators and policymakers, incorporating out-of-level items in formative assessments for accurate feedback is recommended. This study made use of a commercial item bank with vertically scaled items across grades and simulated student responses in a computerized adaptive testing (CAT) environment. Results of the study suggested that administration of out-of-level items improved measurement accuracy and test efficiency for students who perform significantly above or below their grade-level peers. This study has direct implications with regards to the relevance, applicability, and benefits of using out-of-level items in CAT.