The increasing use of criterion referenced testing (CRT) among the various branches of the federal government is described. The requirements of the merit system have tended to promote the use of norm referenced tests except for uses such as pass/fail performance tests. The two areas in which criterion-referenced tests have been most useful are training and occupational licensure. The military services have lead the way in using criterion-referenced tests in their training programs in spite of their high initial costs because the CRT's are effective screening devices and diagnostic aids and for evaluation of instruction. The Internal Revenue Service has established a centralized testing program capable of providing feedback to course developers, program managers, and instructors. Its manual item banks are being converted to computerized banks. The Social Security Administration has developed an extensive programmed instruction system based on criterion-referenced testing. The Civil Service Commission's Bureau of Training is considering the use of criterion-referenced testing to evaluate training programs. Properly developed criterion-referenced tests should meet the requirements of the Uniform Guidelines on Employee Selection Procedures. (CTM)