A study was conducted to investigate the relationship between educational attainment in psychology and diagnostic competence with the Diagnostic and Statistical Manual of Mental Disorders (DSM) II and III systems. Five subject groups served to define the variable of educational attainment in psychology: (1) 33 introductory undergraduate psychology students; (2) 29 advanced undergraduate psychology students; (3) 30 first year graduate psychology students; (4) 28 fourth year graduate psychology students; and (5) 30 licensed doctoral level psychologists. The licensed psychologists were also compared to a group of 29 unlicensed master's level psychologists to determine the relationship between advanced training in psychology and diagnostic accuracy. Subjects based their diagnoses upon a videotape of seven diagnostic interviews. A significant relationship was found between educational attainment in psychology and both DSM-II accuracy (p<.001) and DSM-III accuracy (p<.001). A linear relationship was also found between educational attainment in psychology and diagnostic reliability with the DSM-II and DSM-III systems. When licensed psychologists were compared to master's level psychologists, licensed psychologists exhibited significantly greater accuracy in identifying the DSM-II condition of "manic depressive illness, manic." Licensed psychologists also obtained a higher level of reliability on the DSM-II and DSM-III than did master's level psychologists. These results support the validity of educational attainment in psychology as a licensing criterion. (Author/NB)