This report describes the development and validation of the Test of Inference Ability in Reading Comprehension: a scaled-answer, multiple-choice test intended for use in Grades 6, 7, and 8. The report discusses the need for and conceptualization of assessment of inference ability; proposes standards and principles of inference appraisal; and discusses test design issues, specifically audience, kinds of discourse, topic familiarity, readability, test format, test length, and passage and item development. Five pilot studies are then presented to show test evolution, providing details of the modifications at each phase of test development. The fifth pilot study (focusing on test validation) is discussed, involving verbal reports of students' thinking as they worked through the test, and providing a reading score for the answer selected and a corresponding thinking score for a student's explanation of why that answer was chosen. Results of this fifth pilot study indicate that for 94% of the items good thinking was significantly correlated with good inference-making and poor thinking to poor inference-making. The report concludes by presenting the final data collection, analyses, results, and directions for future research. (Thirteen tables of data are included, and 98 references are attached. Two appendixes providing the reading and thinking rating scales for the test conclude the report.) (SR)