Language testing and assessment have grown in popularity and gained significance in the last few decades, and there is a rising need for assessment literate stakeholders in the field of language education. As teachers play a major role in assessing students, there is a need to make sure they have the right level of assessment knowledge and skills to accomplish their duties as assessors. The present study sought to develop and validate an assessment literacy test. To this end, a thirty-five scenario-based Language Assessment Literacy Test (LALT) was developed based on the seven standards covered by the Standards for Teacher Competence in Educational Assessment of Students (1990). Construct validity of the test was investigated by collecting data from 168 Iranian EFL teachers. To investigate the validity of the measure, tests of reliability, item difficulty, and item discrimination were carried out. The test was then subjected to EFA (Exploratory Factor Analysis whose results showed a seven-factor solution for the test items. The implications of the study for EFL teachers, language testers, teacher trainers, and curriculum developers are discussed.