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The purposes of this paper are to: 1) present a conceptual framework that supports development of a computer adaptive test (CAT) outcome measure of physical functioning for children with cerebral palsy; 2) illustrate the development and refinement of an item bank for use in the CAT; and 3) describe the intended application of these newly developed items in a CAT platform. Improvement in physical functioning is one of the most important developmental and rehabilitative outcomes for children with cerebral palsy (CP). Computer adaptive testing technology provides means to improve outcome measures. We adopted a conceptual framework appropriate to support a CAT of physical functioning consisting of 4 sub-domains: lower extremity skills, upper extremity skills, physical activity, and global physical health. Review of existing tests and measures of physical function, expert clinician review, and cognitive testing were used to identify, develop and refine sets of items (item banks) that reflect the breadth of each sub-domain. These item banks will be used to develop contemporary parent-report instruments by application of Item Response Theory (IRT) analyses, leading to a CAT outcome measure. Such CAT approaches can efficiently assess broad areas of physical functioning across a wide age-range and levels of severity of children with CP.