A two-stage testing strategy is one method of adapting the difficulty of a test to an individual's ability level in an effort to achieve more precise measurement. A routing test provides an initial estimate of ability level, and a second-stage measurement test then evaluates the examinee further. The measurement accuracy and efficiency of item response theory (IRT) based two-stage testing was investigated in comparison with an individualized computerized adaptive test (CAT). Eighteen simulated two-stage tests and three fixed-length CATs differing in the number of test items administered were compared. Abilities were generated for a sample of 1,600 simulees. Results indicate that the statistical characteristics of the routing test have a major influence on measurement precision in ability estimation. Overall, it was apparent that a fixed-length CAT is superior to the two-stage tests of equivalent length in terms of measurement accuracy and efficiency. IRT-based two-stage tests using rectangular distribution of item difficulties in the routing test and an odd number of second-stage tests produced more accurate theta estimates than did the other two-stage test configurations studied. IRT-based two-stage tests may sometimes be practical alternatives to CAT, considering its limitations. Two tables and 18 graphs present analysis results. (SLD)