This report reviews the historical development of out-of-level testing, from its inception in Title I evaluation work during the 1960s, to the present day when the widespread use of assessments or district and school accountability has been combined with requirements for including all students in assessments. This report examines the historical development of out-of-level testing (the administration of a test at a level above or below the student's age or grade level), how the literature defines out-of-level testing, how out-of-level testing has been studied and the rationale supported by the approach taken, and what is missing from the literature. Three interrelated themes are discussed as the rationale for testing students out of level: (1) overly difficult tests promote increased guessing and student frustration, which reduces the accuracy of the test results; (2) students who are tested at their level of functioning receive test items that are better matched to their instructional delivery, which increases the precision of the test results; and (3) no definitive data support either the use or nonuse of out- of-level testing with students with disabilities. The review supports the rationale for the construct of out-of-level testing, while an entry point into understanding the effects of testing students out of level, is neither extensive nor complete. (Contains 35 references.) (CR)