Assessment is at the center of a decision-making model within a Response to Intervention (RTI) framework. Assessments that can be used for universal screening and progress monitoring in early childhood RTI models are needed that are both psychometrically sound and appropriate to meet developmental needs of young children. The Preschool Early Literacy Indicators (PELI), an assessment tool developed for screening and for progress monitoring, was designed to incorporate psychometrically sound assessment practices within an authentic assessment format. The current study provides data on concurrent and predictive validity of the PELI as well as analyses leading to the development of preliminary benchmark goals on the PELI. The PELI demonstrates significant differences in performance by age and growth in early literacy and language skills across the preschool years. Correlations between the PELI and criterion measures of similar skills are moderate to strong and predictive probabilities with respect to outcome measures are moderate to strong.