Data from instruments which are technically adequate and which inform instruction are not only considered best practice, but are legally mandated by laws such as the Individuals with Disabilities Education Improvement Act and No Child Left Behind. The Phonics Diagnostic Inventory (PDI) was designed to assess students' proficiency with specific phonic skills to guide intervention for those at-risk for reading difficulties. The purpose of the current study was to extend a prior reliability study (Pirani-McGurl, 2009) and to assess the validity of a subset of PDI items. Concurrent validity between the PDI and TOWRE and DIBELS oral reading fluency (ORF) measures and predictive validity between the PDI and DIBELS ORF measures were examined. Validity of the PDI was also examined via its inclusion within a path model of literacy development and exploratory examination of potential cut scores of the estimated PDI score were conducted to maximize classification accuracy between measures. Results indicated that the modified PDI demonstrated good concurrent and predictive validity with the ORF and TOWRE measures. While the originally proposed path model did not demonstrate good fit, alternative models proposed showed improved fit indices. Potential cut scores are identified and the rate of true positives and negatives are reported. Limitations and future directions are discussed. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com/en-US/products/dissertations/individuals.shtml.]