This report is aimed at helping Congress better understand the functions, history, capabilities, limitations, uses, and misues of educational tests; learn more about the promises and pitfalls of new assessment methods and technologies; and identify and weigh policy options affecting educational policy. To prepare this report, the Office of Technology Assessment (OTA) examined technological and institutional aspects of educational testing. This report synthesizes the OTA's findings and outlines options for congressional action. The following chapters are included: (1) "Summary and Policy Options"; (2) "Testing in Transition"; (3) "Educational Testing Policy: The Changing Federal Role"; (4) "Lessons from the Past: A History of Educational Testing in the United States"; (5) "How Other Countries Test"; (6) "Standardized Tests in Schools: A Primer"; (7) "Performance Assessment: Methods and Characteristics"; and (8) "Information Technologies and Testing: Past, Present, Future." The OTA concludes that examining the capability of tests to meet specific objectives is necessary to resolve the conflict over testing in American schools. Issues now before the Congress that could fundamentally alter American testing are changes to the National Assessment of Educational Progress, proposals for national testing, and revisions to provisions for educationally disadvantaged children. Appendix A provides a 63-item list of acronyms, and Appendix B provides a 12-item bibliography of related contractor reports. (SLD)