Reviewed and critiqued the relevance of the DSM-III-R for school psychological practice. Five misguided assumptions upon which the use of the DSM-III-R system is based are presented. These assumptions deal with: (a) medical model conceptulization of behavior, (b) reliability, (c) validity, (d) relevance for special education placement, and (e) treatment validity. Based on a critical analysis of each assumption, we concluded that the DSM-III-R is largely irrelevant for the practice of school psychology. The absence of treatment validity was judged to be the most substantial deficit of the DSM-III-R. An alternative classification system based on a functional analysis of behavior was proposed as being more relevant for assessment, classification, placement, and intervention with students who are behaviorally disordered.