A functional design model for a computerized adaptive testing (CAT) system was developed and presented through a series of hierarchy plus input-process-output (HIPO) diagrams. System functions were translated into system structure: specifically, into 34 software components. Implementation of the design in a physical system was addressed through brief discussions of hardware, software, interfaces, and personnel requirements. Further steps in CAT system development were identified, including design testing, evaluation, and refinement. Both micro- and mini-computer-based hardware configurations were evaluated and found capable of supporting test administration and station monitoring. The functional design model and the system structure specified in this report were recommended for the Department of Defense CAT system. (Author)