The School Mastery of Reading Test (SMRT) program was designed to give administrators and teachers information about reading performance and recommendations for improving the instructional program. The project includes development of a valid and reliable reading test based on the New York City curriculum in order to assess the potential linkage between school level diagnosis and prescription to enhance the progress of schools. The SMRT was administered to 1,979 third and 1,810 fourth graders in the fall of 1986 and the spring of 1987. The students were from nine Comprehensive Assessment Report (CAR) elementary schools in the three Community School Districts. Improvement in the students' scores supports the test's validity. Reliability estimates indicate that the SMRT can be reliably used. A framework for establishing SMRT performance standards is illustrated using the Metropolitan Achievement Test and the Degrees of Reading Power Test with judgments from a panel of New York City educators. Test performances are documented in numerous tables and graphs. Instructions for completing a test review and SMRT-STEPS supplemental guidelines for test review are appended. (SLD)