An interspinous process spacer diagnostic balloon catheter and method. The balloon catheter has a main expandable member, a distal expandable member and a proximal expandable member that all can be expanded from a collapsed configuration to an expanded configuration and then collapsed again to a collapsed configuration. The device can be used to determine whether a particular patient is a candidate for implantation of an interspinous process spacer to treat the symptoms of lumbar spinal stenosis and the size of such a spacer if indicated.