This report summarizes some of the literature focusing on specific aspects of the cultures of American Indians and the concommitant testing and assessment problems. The issues of non-competitiveness, language barriers, and a high incidence of middle ear disease among American Indian children are examined as they affect the assessment process. The validity of cognitive measures, personality tests, neuropsychological evaluations, and interest inventories in testing American Indian children is discussed. Research is reviewed which examines some of the cultural differences that affect test performance and the assessment process, including test anxiety, locus of control, and self-esteem. Six problems frequently cited regarding the use of tests with minorities are listed: (1) inappropriate content; (2) inappropriate standardization samples; (3) examiner and language bias; (4) inequitable social consequences; (5) measurement of different constructs; and (6) differential predictive validity. Recent advances in psychometrics and test construction which have contributed to more equitable assessment of native American children are discussed, including the development of the Kaufman Assessment Battery for Children and the Kaufman Test of Educational Achievement, revisions and/or renorming of the Wide Range Achievement Test-Revised and the Stanford-Binet, Form L-M, and the use of various scales as an alternative to tests. Finally, a list of 18 strengths and positive characteristics of divergent groups and culturally different children is provided. A 32-item reference list is appended. (NB)