A new diagnostic instrument, the Conceptual Survey on Wave Optics (CSWO), was developed and validated on 224 high school students (aged 18–19 years) in Croatia. The process of test construction, which included the testing of 61 items on the total of 712 students is presented. The final version of the test consists of 26 multiple-choice items which cover basic conceptual aspects of interference, diffraction, and polarization of light at the high school level. The construction of the test and the evaluation of its functioning and validity were conducted using the Rasch model. The test construct was based on the increasing levels of cognitive complexity in accordance with the Webb's depth of knowledge model. The theoretical construct was empirically confirmed, and it suggests that the explanations of wave optics phenomena and their application to real-life situations are the most difficult aspects of high school students' understanding of wave optics. The results of the Rasch analysis suggest that the CSWO is a reliable diagnostic instrument suitable for administration as a post-test to high school students after instruction on wave optics and possibly also for university level students in some introductory physics courses.