Exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) have contributed to test development and validation in counseling psychology, but additional applications have not been fully realized. The author presents an overview of the goals, terminology, and procedures of factor analysis; reviews best practices for extracting, retaining, and rotating factors in EFA; describes issues related to CFA, including potential hypotheses, how parameters are estimated, and current guidelines regarding sample size and the use of fit indices; and reviews more sophisticated applications of CFA, including multiple-groups analysis and testing of hierarchical models. Finally, the author recommends how to increase the application of factor analysis to counseling psychologists' work in research, training, and practice settings. (Contains 5 tables, 4 figures and 7 notes.)