This report reviews and evaluates the tradition of assessing early literacy with formal tests. It begins with a historical account of the readiness movement, focusing on the development of formal measures of early literacy and tracing the development of the movement into the 1980s. Next, the paper analyzes in depth tests that are currently available. Based on this analysis, the paper concludes that commercially available tests measure tasks that few would label literacy and recommends that future tests be designed to reflect both the emergent literacy tradition and the belief that teachers are professionals who need the best information possible to make informed decisions about children. Eight tables of data and 14 figures are included, and 43 references are attached. (Author/SR)