Embedded flash memory has been widely used in applications that require non-volatile on-chip storage elements. However; test and diagnostics of flush memories needs further investigation so that the overall cost of the products can be reduced. This paper presents the challenges and issues for test and diagnostics of flash memories, based on our recent experiences. We also suggest improvement of the test and diagnosis flow, including design-for-testability (DFT) using built-in self-test (BIST), built-in self-repair (BISR), and failure analysis. In addition, we present a configurable flash memory tester using FPGA for low-cost testing and diagnostics. Experimental results on industrial flash chips justify the effectiveness of our test and diagnostics system.