In many industries, such as the wave energy industry, the importance of accurate physical model testing in the development process to full scale devices cannot be overemphasized. This paper presents a new, high-precision wave tank testing system and process designed and implemented by Columbia Power Technologies (CPT) and Oregon State University (OSU). The system's high level of functionality was demonstrated during characterization of CPT's wave energy converter (WEC) and is now established at OSU's O.H. Hinsdale Wave Research Laboratory (HWRL), in collaboration with the Northwest National Marine Renewable Energy Center (NNMREC) headquartered at OSU. The critical instrumentation, optical motion tracking system, data acquisition and related components developed for wave tank testing are fully characterized herein, and the paper concludes with example testing of a scaled wave energy device including experimental results.