Designed for use by literacy specialists, resource teachers, and classroom teachers, this book presents a diagnostic battery encompassing vital areas of evaluation based on research and practice, efficient in administration and interpretation, and relatively inexpensive. The third edition of the book has been revised to improve its organization; increase its passages' appeals to beginning readers; provide more guidance for subtest selection; and expand content related to authentic assessment. The reader's passages are now in a separate booklet with illustrations added to the primary-level passages. Part 1 of the book discusses the inventory and its development. Part 2 discusses preparation for using the inventory. Part 3 presents the test battery, including word recognition lists; graded reading passages (preprimer through twelfth-grade level of difficulty); spelling tests; visual and auditory discrimination tests; a phonics and structural analysis test; cloze tests, and oral language, writing, arithmetic, and open book reading assessments. Part 4 of the book addresses portfolio assessment. (RS)