Topics related to the National Assessment of Educational Progress (NAEP) are discussed. Issues affecting the impact of testing on education include: what is tested; how scores are referenced; internal versus external sources of testing; and the rewards, sanctions, or stakes associated with test results. Testing has both intentional (direct) and indirect effects. Seven principles regarding the impact of testing are especially true when the tests are used for important social decisions: (1) measuring any social indicator results in its distortion or change in status; (2) the power of testing is determined by the perception of its effects; (3) teachers will teach to the test; (4) previous tests influence curriculum content; (5) instruction and learning are adjusted to test format; (6) test results become a major goal of education; and (7) control of the curriculum is transferred to the testing agency. NAEP can use test information: (1) to inform policy makers about the current state of education, or (2) as administrative devices in policy implementation. NAEP is the most valid source of national achievement data and has been designed to inform educational policy making, rather than to direct it. Increasing its policy-making ability might have distorting effects or threaten test validity. It has been, and will continue to be useful as a model for other testing activities. (A list of ERIC references concerning assessment is included.) (GDC)