This handbook is a guide to help educators and administrators with the decisions they face in the design of an arts assessment. The guide is divided into two broad parts: Part 1: "Background for Thoughtful Arts Education Assessment"; and Part 2: "Assessment Design in Action." The guide includes: (1) a brief background on the standards and assessment movement; (2) a basic three-phase plan to orchestrate a district or state arts assessment; (3) a set of flexible steps to lead people through planning, developing, and implementing their program design; (4) activities that will help address key issues and make administrative decisions to carry out the assessment; and (5) concrete examples drawn from existing state arts assessment efforts, and the National Assessment of Educational Progress (NAEP) Arts Assessment. Contains 17 references. Appended is a performance exercise in dance for grades 9 through 12. (BT)