In general, the software testing phase takes around 40-70% of the time and cost during the software development life cycle. Software testing is well researched over a long period of time. Unfortunately, while many researchers have found an efficient test case generation methods to minimize time and cost, there are still a number of important research issues. The primarily issue that motivated this study is to: consume a great amount of time and cost to automatically generate tests from diagrams, with a huge size of tests and less test coverage. Therefore, this paper introduces an effective test sequence generation technique to minimize time, cost and size of tests while maximizing test coverage. The proposed technique aims to derive and generate tests from state chart diagram. The diagram is widely-used to describe a behavior of the system. In addition, this paper discusses and determines the best effective test generation methods that derive tests from diagrams.