This paper focuses on the current developments in regard to the assessment of language proficiency in children who are from non-English speaking backgrounds. Instruments currently used to assess language proficiency for placement in English programs usually fail validity and reliability tests. These tests usually measure formal aspects of language omitting the importance of function in communicative skills. The data used in this study are part of a larger study of language proficiency which includes six bilingual children at different levels of proficiency in both Spanish and English. The study is both qualitative and ethnographic in nature. The children's language repertoire was collected at school and in the community through the use of video and audio tapes and collected field notes. The results of the analysis illustrate that only a small amount of the child's natural language repertoire is measured with tests currently used to measure language proficiency. The authors suggest that discourse analysis be used as a means for enhancing the measurement of language proficiency and for looking at communicative competence. Such analysis provides insight into what children are capable of, rather than what they are incapable of, doing linguistically. (Author/JK)