Computer Adaptive Testing (CAT) has been highlighted as a promising assessment method to fulfill two testing purposes: estimating student academic ability and classifying student academic level. In this paper, we introduced the Web-based Adaptive Testing System (WATS) developed to support a cost effective assessment for classifying students’ ability into different academic levels. Instead of using a traditional paper and pencil test, the WATS is expected to serve as an alternate method to promptly diagnosis and identify underachieving students through Web-based testing. The WATS can also help provide students with appropriate learning contents and necessary academic support in time. In this paper, theoretical background and structure of WATS, item construction process based upon item response theory, and user interfaces of WATS were discussed.