This report addresses how reading comprehension can be assessed when children have limited decoding skills. Successful teachers use reading assessments for many purposes. A Center for the Improvement of Early Reading Achievement (CIERA) survey of 496 teachers in "beat the odds" schools revealed that they use many informal reading tasks to assess children's skills, knowledge, and fluency on a daily basis. They use "internal" assessments under their control more often than "external" assessments created by publishers or mandated by others. Paradoxically, teachers believe that administrators give more attention to external, high-stakes assessments than the internal assessments of daily work that are linked to instruction. It is also paradoxical that teachers report their training for internal assessments as "Good" but their training to use external assessments was only "Fair." This report outlines the benefits of a developmental approach to early reading assessment based on teachers' internal assessments that are tailored selectively for children and the curriculum. (Contains 4 tables, guidelines for assessment with children 3-8 years of age, and 26 references.) (NKA)