The Western Cooling Challenge is a multiple-winner competition that invites manufacturers to develop and commercialize the next generation of rooftop packaged air conditioners appropriate for dry western United States climates. Certification centers on requirements for sensible energy efficiency at two separate test conditions that are representative of western climates. Criteria for minimum energy and water use efficiency were developed based on the estimated performance of market-available retrofit solutions for conventional rooftop package units; thus it is expected that comprehensive ground-up system designs should easily achieve the performance requirements. This paper outlines and discusses the development of the test protocol and performance criteria for the Challenge. The choice of laboratory test conditions is discussed. The rationale for and calculation of performance metrics including nominal cooling capacity and credited cooling capacity are presented. Additionally, the assumptions underlying requirements for minimum sensible energy efficiency are summarized, and key nonperformance- based criteria for the program are explained.