This paper reviews eight major problem areas concerning testing practices of interest to professionals practicing psychology in the schools. These areas, identified by the Task Force on Psychology in the Schools of the American Psychological Association, include: (1) test use; (2) diagnostic versus placement tests; (3) informed parental consent for special education placement; (4) inappropriate placement of minority children in special education; (5) decision-making data regarding individual differences for educational placement and procedures; (6) population test validity issues; (7) quality and appropriate use of tests; and (8) the development of assessment procedures to determine children's educational needs. Attention is also given to seven action areas identified by the Task Force which would address these problems. The remaining portions of this paper discuss challenges faced by professional psychologists in converting research knowledge into improved school testing practices, specifically, improving the assessment and analysis of student's learning abilities and language skills through dynamic assessment of cognitive skills and assessment of communicative competence. Attention is called to improving and updating the scientific knowledge-base of professional psychologists, improving schools' capabilities to monitor and manage implementation of innovative testing practices, and to fostering collaborative relationships between school psychologists and academic researchers on testing innovations. (PN)