The paper presents 12 steps in developing and validating criterion referenced tests (CRTs). The author emphasizes the need to closely examine the test's stated purpose and trace the test through the 12 steps in order to find CRTs that are useful rather than useless. Examples are given for each step: preparing or selecting objectives; developing specifications; preparing items; performing initial editing; systematically assessing items for validity; assembling the tests; selecting and implementing a method for setting standards to interpret test performance; administering the test; collecting and analyzing reliability, validity, and normative data; preparing user's and technical manuals; and compiling ongoing data on test items and tests in different situations with different populations. (CL)