As the first paper in a series of policy papers on high-stakes student assessment programs, this paper examined high school graduation tests. High stakes refers to the use of test results to make important decisions about the test taker. Whether to use a high school graduation test is an essential policy question that will be addressed in a forthcoming paper; how to develop a sound graduation test is the focus of this paper, and most of the material is drawn from the experiences of the seven states participating in the North Central Educational Research Laboratory (NCREL). Brief descriptions of graduation requirements and tests are given. An expert panel employed by the NCREL to help Michigan develop its high school graduation test offers recommendations in the broad categories of (1) content specification, (2) psychometric issues, (3) educational issues, (4) legal issues, (5) policy and administrative issues, and (6) human and financial resources. (SLD)