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Power dissipation in digital circuits during scan-based test is generally much higher than that during functional operation. Unfortunately, this increased test power can create hot spots that may damage the silicon, the bonding wires, and even the package. It can also cause intensive erosion of conductors-severely decreasing the reliability of a device. Finally, excessive test power may also result in extra yield loss. To address these issues, this paper first presents a detailed investigation of a benchmark circuit's switching activity during different modes of operation. Specifically, the average number of transitions in the combinational logic of a benchmark circuit during scan shift is found to be approximately 2.5 times more than the average number of transitions during the circuit's normal functional operation. A DFT-based approach for reducing circuit switching activity during scan shift is proposed. Instead of inserting additional logic at the gate level that may introduce additional delay on critical paths, the proposed method modifies the design at the register transfer level (RTL) and uses the synthesis tools to automatically deal with timing analysis and optimization. Our experiments show that significant power reduction can be achieved with very low overhead.