Guidelines for the use of observation instruments in pre-and in-service teachers of the handicapped are provided. It is explained that guidelines have been developed according to the following five principles: (1) the observation instrument must be relevant (including empirical, normative, and interpretative relevance); (2) methods of gathering observation data should be feasible and cost-effective (including collection, storage, and retrieval of the information); (3) observation data should be reliable (including both accuracy and dependability); (4) observation data should be valid according to three criteria - context, process, and outcome; and (5) observation data should be planned so as to provide maximum impact (which is the ultimate test of classroom observation methods). A checklist with questions to assess the instrument according to the five principles is included. (Author/PHR)