Described is the development and evaluation of a module for teaching special education teacher trainees to determine a pupil's instructional reading level through the use of an informal reading inventory (IRI). Among the topics covered in Part I on developing the instructional module are needs assessment, a review of relevant literature, review and evaluation of existing modules, task and concept analyses used to formulate instructional objectives for the module, the design of criterion-referenced tests and prototype materials, and formative evaluation. Discussed in Part II is the project's summative evaluation phase, in which the module's effectiveness was tested with 62 university students enrolled in three special education methods classes. It was concluded that the module was an effective tool for helping trainees to determine the instructional reading levels of exceptional pupils. Included in the extensive appendixes are materials for the needs assessment study; detailed instructions for utilizing, coding, analyzing, scoring and interpreting an IRI; and a sample achievement test with scoring rules and answer key. (LH)