The present article sets forth the argument that psychological assessment should be based on a construct's latent structure. The authors differentiate dimensional (continuous) and taxonic (categorical) structures at the latent and manifest levels and describe the advantages of matching the assessment approach to the latent structure of a construct. A proper match will decrease measurement error, increase statistical power, clarify statistical relationships, and facilitate the location of an efficient cutting score when applicable. Thus, individuals will be placed along a continuum or assigned to classes more accurately. The authors briefly review the methods by which latent structure can be determined and outline a structure-based approach to assessment that builds on dimensional scaling models, such as item response theory, while incorporating classification methods as appropriate. Finally, the authors empirically demonstrate the utility of their approach and discuss its compatibility with traditional assessment methods and with computerized adaptive testing. (PsycINFO Database Record (c) 2005 APA ) (journal abstract)