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Output selection is a recently proposed test response compaction method, where only a subset of output response bits is selected for observation. It can achieve zero aliasing, full X-tolerance, and high diagnosability. One critical issue for output selection is how to implement the selection hardware. In this paper, we present a counter-based output selection scheme that employs only a counter and a multiplexer, hence involving very small area overhead and simple test control. The proposed scheme is ATPG-independent and thus can easily be incorporated into a typical design flow. Two efficient output selection algorithms are presented to determine the desired output responses, one using a single counter operation for simpler test control and the other using more counter operations for achieving a better test-response reduction ratio. Experimental results show that for stuck-at faults in large ISCAS'89 and ITC'99 benchmark circuits, 48%~90% reduction ratios on test responses can be achieved with only one counter and one multiplexer employed. Even better results, i.e., 76%~95% reductions, can be obtained for transition faults. It is also shown that the diagnostic resolution of this method is almost the same as that achieved by observing all output responses.