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OBJECTIVE: Training in psychodynamic psychotherapy remains a core requirement of psychiatric residency training programs, yet no standard measures of competency exist to document residents’ knowledge and skills in this area. To address this issue, the authors developed a written test of applied knowledge of psychodynamic psychotherapy technique and theory, the Psychodynamic Psychotherapy Competency Test. Their goal in this article was to evaluate the validity of this test. METHOD: The test was given to a group of 36 psychoanalytic experts and 206 residents in their second, third, and fourth psychiatric postgraduate years from 10 programs located in different parts of the United States. Program directors provided information on the number of hours of psychodynamic didactic teaching, supervision, and resident-conducted psychodynamic psychotherapy and rated the psychodynamic psychotherapy skills of residents in their fourth postgraduate year on the basis of cumulative supervisor reports. RESULTS: There were significant differences in test performance between residents and faculty experts and between residents in their second and fourth postgraduate years: more advanced residents and experts had progressively better scores. The mean scores of fourth-year residents in different programs differed significantly, but the scores of second-year residents did not. Higher test scores were positively associated with both number of hours of resident-conducted psychotherapy and number of hours of supervision. Among fourth-year residents, test scores correlated significantly with program director evaluations. CONCLUSIONS: This initial study supports the validity of the Psychodynamic Psychotherapy Competency Test as well as the feasibility of testing psychotherapy skills in a standardized fashion.