Research procedures used in the development and validation of R/EAL (Reading/Everyday Activities in Life), a new test to overcome problems in assessing functional literacy among adolescents and adults, are described. Specific objectives of the study were to: (1) provide information about the design and development of R/EAL, including determination of reading criteria, establishment of task analyses, production and selection of individual test items, development of test format and procedures, and completion of the final version of R/EAL; and (2) provide information about the validation of R/EAL, including procedures and data on reliability and validity for a select sample. Following field testing of the R/EAL, a revised version of the instrument was developed, which contains reading criteria selected from common daily reading materials; includes tasks related to each criterion developed based on the reading functions required to deal with the individual criteria; and presents all directions and questions in aural form via individually operated cassette players. The methodology used for validating R/EAL, including sample selection, testing procedures, and item analysis, is described, and data relating to individual item and total test statistics, factor analysis data, reliability, and validity are reported. The reliability and validity figures on R/EAL tend to support its use as a viable assessment instrument for functional literacy. Item analysis figures show a difficulty level of items for the total group raining from .35 to .97 with a median of .60. (DB)