The history of testing and evaluation in Indian education has been less than satisfactory since achievement and intelligence testing instruments traditionally have been norm-referenced, rather than criterion-referenced, and have not accounted for cultural differences. The Indian Education Act of 1972 provides for Indian involvement in the evaluation of Federal Indian education programs. Sound testing and evaluation procedures should make provision for validity, reliability, and practicality, while useful program evaluations should include: (1) tangible criteria; (2) accurate and relevant information; (3) an evaluation plan; (4) a program description; (5) able and cooperative people; and (6) use of and reports of the results. Issues critical to policy information under the Act should include consideration of: (1) pluralism; (2) multilingualism; (3) poverty; and (4) cultural differences. Position statements on the evaluation of Indian education programs are proposed as follows: (1) the authority for external evaluation should be exercised by local Indian communities; (2) use of norm-referenced standardized achievement and IQ tests should be discouraged; (3) an evaluation review panel should be organized to review projects and applications for adequacy of evaluation plans and degree of community participation in evaluation. (JC)