Designed to be a tool for curriculum and instructional development consistent with assessment of the state objectives in reading, this teaching and testing guide provides a summary of the skills that should be considered instructionally and how each objective is tested. Information is included on state objectives for reading teachers for grades 1, 2, and 3. General information which applies to all grades or particular grade ranges and specific by-grade information is provided within each of the six state reading objectives: (1) decoding and word meaning, (2) details, (3) main idea, (4) reference usage, (5) inference, and (6) analysis of literature. For each objective, instructional activities are suggested for helping the student learn the basic skills. The reading levels of the tests for each grade are presented in tabular form. A cumulative reading word list is included. Procedures and examples are offered for writing test items. (Author/PN)