This paper examines some impacts of basic skills proficiency testing of teachers in Arizona. A discussion of some legal issues involved in teacher proficiency testing is presented. Specific cases are cited which illustrate the fact that the courts have ruled that testing must show "job-relatedness" and a "rational basis for use." It is pointed out that, in spite of high rates of minority failure, the courts have ruled that basic skills proficiency testing is related to the states'"legitimate employment needs." It is noted that court rulings on test validation have steered states toward criterion-referenced examinations which measure basic skills, professional knowledge, and content area ability. The Arizona Performance-Based Teacher Certification program, which consists of a basic skills subtest, a professional knowledge subtest, and a proposed competency-based two year teacher residency program, is described. The major focus of this description is on the Basic Skills subtests and some impacts this has had on teacher education in Arizona. Results of the Arizona Teacher Proficiency Exam in the basic skills component statewide, and at Northern Arizona University, are examined. Finally, some early testing results are analyzed. This includes a discussion of some test score correlations with other measures of student ability as well as a discussion of implications for minority students. (JD)