The purpose of this study was to determine the validity of the Development Edition (pilot version) of the Pediatric Evaluation of Disability Inventory (PEDI) in groups of disabled and nondisabled children. The PEDI is a new functional assessment instrument for the evaluation of disabled children aged 6 months to 7 years. The PEDI has been developed to identify functional status and change along three dimensions: 1) functional skill level, 2) caregiver assistance, and 3) modifications or adaptive equipment used. The PEDIs were administered as a parental-report questionnaire, and the results were compared with data obtained by the Battelle Developmental Inventory Screening Test (BDIST). The BDIST is a standardized assessment with developmental and adaptive content. Subjects were 20 children between the ages of 2 and 8 years with arthritic conditions and spina bifida and 20 nondisabled children matched for age and sex. All subjects' scores on the BDIST cognitive domain were no greater than 1.50 standard deviations below the mean for their age group. Concurrent validity was supported by moderately high Pearson product-moment correlations between BDIST and PEDI summary scores (r = .70-.80). Construct validity was supported by significant differences between the disabled and nondisabled groups' PEDI scores and by discriminant analysis identifying the PEDI scores as better group discriminators than the BDIST scores. Results validate the Developmental Edition of the PEDI and support the further development and standardization of the final version. Use of the PEDI in clinical pediatric physical therapy practice is discussed.