This paper describes the development of a criterion-referenced, performance-based measure of third grade reading comprehension. The primary purpose of the assessment is to contribute unique and valid information for use in the formative evaluation of a whole literacy program. A secondary purpose is to supplement other program efforts to communicate and reinforce objectives for student performance and instructional practices. The Kamehameha Schools/Bishop Estate is a private non-profit educational institution in Hawaii. One of its largest and oldest projects is the Kamehameha Early Education Program (KEEP), which is designed to improve the literacy skills of native Hawaiian children by improving the quality of instruction they receive. KEEP hires and trains teacher consultants for public elementary schools to provide training and support. An innovative student assessment was developed to determine student outcomes supplementing a portfolio approach with a criterion-referenced test with performance-based constructed response items. Assessment development was a collaborative effort of educators, students, and evaluators that was field-tested in 1991. The prototype assessment directly taps curricular objectives in a format that is congruent with instructional practices. There is a 14-item list of references. (SLD)