ABSTRACT Adjustment refers to the extent to which an individual meets the demands of the environment effectively. The study of adjustment holds importance, particularly, in adolescence as this period involves rapid changes in biological, cognitive and socio-emotional spheres of adolescent lives It is often stressed that the counselors working with adolescents should identify the contextual factors contributing to the emotional and/or behavioral problems often experienced by the adolescents. In view of the lack of a comprehensive and well-standardized adjustment inventory in Telugu, one of the most widely spoken Indian languages, and the sharp increase in the number of students joining English medium schools, the present study aims at developing the Adolescent Adjustment Inventory (AAI) in both English and Telugu languages for use with the Telugu speaking adolescents. The development of AAI involves several stages, starting from item comprehensibility analysis to development of norms. Based on the experts' opinions and the existing adjustment measures five major adjustment contexts in adolescents lives, namely, home, health, academic, social and emotional adjustment, were identified as the basis for developing/identifying the items. 332 items were developed in English and then translated into Telugu. Independent back translation and Differential Item Functioning (DIF) analyses indicated that the two language versions are linguistically equivalent.