Latent trait theory supposes that, in testing situations, examinee performance on a test can be predicted (or explained) by defining examinee characteristics, referred to as traits, estimating scores for examinees on these traits and using the scores to predict or explain test performance (Lord and Novick, 1968). In view of the breakthroughs in several testing problem areas brought about by the use of latent trait theory, it is clear that the field of latent trait theory will become increasingly more important to measurement specialists and test practitioners. This paper comprehensively reviews this field and addresses four matters. First, the nature and characteristics of latent trait theory are introduced. Second, a review of many of the technical developments in the field is provided. Third, several promising applications of latent trait models are described. Finally, some additional areas for research and development are suggested. (RC)