A study was conducted to investigate the decision-making and diagnostic processes of classroom teachers in reading diagnosis. Ten teachers interacted with simulated cases of reading difficulties in a laboratory setting and were observed and interviewed in their own classrooms about their instructional and diagnostic practices. Data analysis consisted of product measures (the outcomes of the interaction with a case), process measures (the manner in which a case was diagnosed), and classroom interviews (the diagnostic categories most frequently thought of by teachers). The major findings were that the teachers (1) showed little agreement with each other on their final stated diagnostic judgments for a case, (2) lacked comprehensive or systematic approaches to gathering and evaluating information about children's reading difficulties, and (3) used similar global diagnostic categories in laboratory situations and in the natural classroom environment. These findings suggest that there is a need for more thorough and effective training of teachers in diagnostic and remedial skills. (Author/AEA)