ABSTRACT The purpose of this study was to test the relationship between moral reasoning, as demonstrated on the Defining Issues Test (DIT), and clinical performance of physical therapist students. Moral reasoning was also tested against eight admission variables as predictors of clinical performance. Subjects were 58 physical therapist students (II male, 47 female) enrolled in three programs. The DIT was administered to all subjects during their first week in the programs. Clinical performance ratings were collected at the conclusion of the students' first clinical affiliation. Participating programs agreed to use the Clinical Competence Scale as the clinical performance instrument. Data quality analysis was conducted to assess consistent application of the evaluation instrument by clinical instructors. Statistical procedures were conducted in three clusters of analysis: (1) Pearson product moment correlation coefficients computed for interval variables and clinical performance ratings, (2) multiple regression of clinical performance with moral reasoning (DIT), including an indicator variable for a qualitative factor clinical setting type, and (3) chi-square test with moral reasoning and clinical performance each distributed into three levels (high, medium, low). An alpha level of. 05 was used to test for significance. Moral reasoning (DIT) was the only variable to demonstrate a significant relationship with clinical performance (r=.28). Multiple regression of clinical per/ormance with moral reasoning, with facility type as a covariant, was significant (r=.44), accounting for 19.4% of the variance. Chi-square analysis resulted in a significant difference from expected frequency for the defined levels of moral reasoning and clinical performance. These find ings are consistent with previous research in medicine and nursing supporting moral reasoning as a predictor of clinical performance. As professional health care providers, physical therapists must possess the necessary moral reasoning skills and perspectives to recognize and resolve ethical dilemmas in clinical practice. In addition, the literature supports a link between the ability to resolve ethical conflicts and the ability to effectively manage complex practice issues. Understanding the relationship between moral reasoning and effective clinical practice is important in designing physical therapy curricula and supporting the development of students. INTRODUCTION The evolution of physical therapy toward professional autonomy requires that physical therapists expertly and efficiently evaluate patients and manage their care within an increasingly complex health care environment. 1-3 The successful physical therapist possesses the knowledge and clinical skills prescribed in professional competencies4 as well as the ability to synthesize, evaluate, and prioritize complex elements of patient management.2 Professional practice also includes the expectation that physical therapists will be morally accountable for this expertise and responsive to the ethical issues frequently occurring in physical therapy practices-8 The expansion of managed care, with increased oversight by financing agencies and incentives for controlling costs, virtually ensures the presence of ethical problems for providers as they attempt to balance patient need, professional obligations, and organizational expectations.9,10 Thus, competence in physical therapy includes the moral reasoning skills and perspectives necessary to recognize and address these ethical issues. The challenge for physical therapy educators is to understand and develop strategies for selecting and preparing students to function at this professional level. A variety of admission criteria are used by physical therapy programs to select those candidates who can be expected to succeed in the academic curriculum and ultimately in professional practice. While these admission criteria are useful in predicting student performance in the academic components of the curriculum, studies have demonstrated little or no correlation between conventional admission criteria and measures of performance in the clinical setting. …