A study investigated the content and predictive validity of Hong Kong's new Use of English Examination (UEE), introduced by the Hong Kong Examinations Authority in 1989. The study set out to discover whether the examination was reliable for determining students' language needs on entering higher education, and whether institutions' existing internal language tests were still necessary. The UEE was compared with the University of Hong Kong's Language Analysis Sessions (LAS) test, used for arts faculty students. Subtest scores on the two tests and end-of-year subject examination scores for 346 university freshmen were analyzed statistically, using correlation and factor analysis. Results suggest that for the purpose of predicting prospective undergraduates' academic performance, the LAS tests are more effective than the UEE. However, it is noted that the former are targeting a more homogeneous and more highly-skilled population. Despite considerable overlap in the skills tested, the UEE and LAS are considered different and not parallel, suggesting that internal institutional testing may still be useful. The new UEE is also seen as more valid than the old UEE in terms of face and predictive validity. (MSE)