Many development projects seek to reach the poorest in the provision of agricultural inputs, extension, credit, education, and many other services. However, low-cost and reliable methods for assessing whether a project reaches the poor are lacking at present. In this paper, we present an operational method that was designed during a two-year research project from 1999-2001 with the support of an international donor-coordination office. The objective of the research was to develop and test a new method that could be later used by development practitioners to assess the poverty level of beneficiaries of development projects that target the poor in relation to the general population in the intervention area. The method constructs a poverty index using principle component analysis, and is based on a range of indicators that describes different dimensions of poverty and for which credible information can be quickly and inexpensively obtained. To ensure the method's usefulness to a wide number of countries and projects, the method was tested in collaboration in rural and urban areas in four countries: Nicaragua (urban and rural), Kenya (urban and rural), Madagascar (rural), and India (rural). We present results from these studies. We conclude that the method has a promising potential for monitoring and evaluation purposes of development organizations. Since 2001, the method has been used in over 20 project assessments.