The rise in Internet usage among young people has seen a corresponding increase in international concern regarding their online safety. In February 2012, the OECD Council adopted a “Recommendation on the Protection of Children Online”. The Recommendation called for governments to support evidence-based policies for the protection of children, including surveys to better understand Internet usage by children and the evolving risks, and programmes to increase awareness of this issue. In line with this Recommendation, the Japanese government has inititated efforts to develop improved indicators to measure Internet literacy among youth. This report describes the results of the Internet literacy indicator development project and constitutes a feasibility study for the development of Internet literacy among youth in different countries. The project formulated an Internet Literacy Assessment Indicator for Students (ILAS), which targeted 15-year-old students to measure their ability to utilise the Internet safely and securely. In 2011, a formative evaluation was conducted for a sample of 569 first-year high-school students from 14 high schools. In 2012, the study conducted a revised nationwide test on a broader sample of 2 464 students from 23 high schools. Evaluation of the results of the ILAS test system confirmed its reliability and validity, attesting to its value as a useful and practical assessment system for measuring youth Internet literacy.