Item response theory provides a useful and theoretically well-founded framework for educational measurement. It supports such activities as the construction of measurement instruments, linking and equating measurements, and evaluation of test bias and differential item functioning. It further provides underpinnings for item banking and flexible test administration designs, such as multiple matrix sampling, flexi-level testing, and computerized adaptive testing. First, a concise introduction to the principles of IRT models is given. The models discussed pertain to dichotomous items (items that are scored as either correct or incorrect) and polytomous items (items with partial credit scoring, such as most types of openended questions and performance assessments). Second, it is shown how an IRT measurement model can be enhanced with a structural model, such as, for instance, an analysis of variance model, to relate data from achievement and ability tests to students’ background variables, such as socio-economic status, intelligence or cultural capital, to school variables, and to features of the schooling system. Two applications are presented. The first one pertains to equating and linking of assessments, and the second one to a combination of an IRT measurement model and a multilevel linear model useful in school effectiveness research.