The authors address conceptual and methodological foundations of incremental validity in the evaluation of newly developed clinical assessment measures. Incremental validity is defined as the degree to which a measure explains or predicts a phenomenon of interest, relative to other measures. Incremental validity can be evaluated on several dimensions, such as sensitivity to change, diagnostic efficacy, content validity, treatment design and outcome, and convergent validity. Indices of incremental validity can vary depending on the criterion measures, comparison measures, and individual differences in samples. The authors review the rationale for, principles, and methods of incremental validation, including the selection of comparison and criterion measures, and address data analytic strategies and the conditional nature of incremental validity evaluations in the selection of measures. Incremental validity contributes to, but is different from, cost-benefits, which reflect the cost of acquiring the data and the benefits from the data. The impact of an incremental validity index on whether a measure is selected will be moderated by the cost of acquiring the new data, the importance of the measured phenomenon, and the clinical utility of the new data.