Despite considerable discussion in the literature about the advantages of observational research and the relative benefits of different coding systems and strategies, little is written about the actual implementation of this assessment strategy. This paper presents an overall framework as well as the essential components involved in collecting (selection of task, setting, unit of analysis, and coding system) and coding (transcribing, selecting and training coders, transforming data, and analyzing reliability) of observational data. To achieve success with observational methods, we emphasize several issues, including (a) the research question as the motivator for all decisions, (b) the interrelatedness of tasks, and (c) the implications of decisions early in the process for later stages of analysis and interpretation. Investigators are encouraged to communicate the details of their observational and coding procedures so that these methods are readily accessible for purposes of replication and comparison.