This report is aimed at helping Congress: (1) better understand the functions, history, capabilities, limitations, uses, and misuses of educational tests; (2) learn more about the promises and pitfalls of new assessment methods and technologies; and (3) identify and weigh policy options affecting educational policy. To prepare this report, the Office of Technology Assessment (OTA) examined technological and institutional aspects of educational testing. This summary and policy chapter synthesizes the OTA's findings and outlines options for congressional action. The analysis and discussion are framed in terms of the functions of testing. The OTA concludes that examining the capability of various tests to meet specific objectives is the necessary first step in resolving the controversy over testing in American schools. Proposals now before Congress could fundamentally alter testing in American education. Three such issues are: (1) proposals for national testing; (2) changes to the National Assessment of Educational Progress; and (3) revisions to the Chapter 1 provisions for educationally disadvantaged children. Recommendations on these issues are summarized. The discussion is supplemented by eight sidebars (Boxes A through H) highlighting specific testing issues. Three figures and six photographs are included. (SLD)