From the perspectives of grounded, situated, and embodied cognition, we have developed a new approach for assessing individual differences. Because this approach is grounded in two dimensions of situatedness—situational experience and the Situated Action Cycle—we refer to it as theSituated Assessment Method(SAM2). Rather than abstracting over situations during assessment of a construct (as in traditional assessment instruments), SAM2assesses a construct in situations where it occurs, simultaneously measuring factors from the Situated Action Cycle known to influence it. To demonstrate this framework, we developed the SAM2Habitual Behavior Instrument (SAM2HBI). Across three studies with a total of 442 participants, the SAM2HBI produced a robust and replicable pattern of results at both the group and individual levels. Trait-level measures of habitual behavior exhibited large reliable individual differences in the regularity of performing positive versus negative habits. Situational assessments established large effects of situations and large situation by individual interactions. Several sources of evidence demonstrated construct and content validity for SAM2measures of habitual behavior. At both the group and individual levels, these measures were associated with factors from the Situated Action Cycle known to influence habitual behavior in the literature (consistency, automaticity, immediate reward, long-term reward). Regressions explained approximately 65% of the variance at the group level and a median of approximately 75% at the individual level. SAM2measures further exhibited well-established interactions with personality measures for self-control and neuroticism. Cognitive-affective processes from the Situated Action Cycle explained nearly all the variance in these interactions. Finally, a composite measure of habitualness established habitual behaviors at both the group and individual levels. Additionally, a composite measure of reward was positively related to the composite measure of habitualness, increasing with self-control and decreasing with neuroticism.