An observation instrument was developed for use in assessing the competence of preservice technology teachers in Taiwan. The observation instrument was developed by using the nominal group technique to gather input from 5 experts in technology education and 60 junior high school teachers with a background in technology education. To evaluate the reliability of the new observation instrument, the teaching of five technology teachers was videotaped and evaluated by five experienced technology teachers and a technology professor. Input regarding the new observation instrument's validity was also obtained through a questionnaire. The experts confirmed that the new observation instrument did indeed have expert validity. The instrument's reliability was determined by calculating the Kendall coefficient, which was determined to equal 0.917 and to confirm that the instrument is indeed reliable. The new observation instrument contains 39 closed- and open-ended items (evaluation criteria) in the following areas: teaching activities (explain the content of living technology, develop teaching activities, use various teaching techniques); teaching presentation (use good oral presentation techniques); classroom management (create a good learning climate, maintain good student discipline and behavior) lab management; and teaching evaluation and feedback. (Contains observation instrument.) (MN)