An overview of the state of the art of using portfolios for assessment and instruction (AAI) and an annotated bibliography of articles focusing on portfolios are provided. Using portfolios for AAI has become a popular practice; however, portfolios are not always clearly defined. A working definition of portfolio is provided: a portfolio is a purposeful collection of student work that exhibits to the student and others the student's efforts, progress, or achievement in a given area or areas; it must include student participation in selection of portfolio content, the criteria for selection and for judging merit, and evidence of student self-reflection. There is little agreement on what can and should be included in a portfolio, mainly because suggested content depends heavily on purpose. Several portfolio systems currently being used in various locations are summarized. The systems are generally of two types: indicator systems in which a list of items is required to be collected on all students, and work sample systems, which rely heavily on ongoing classroom work that is selected and analyzed by students and/or teachers. Ways of promoting self-reflection and self-evaluation in students are outlined. The following issues in using portfolios for AAI are summarized: purposes; curriculum and instruction; content; assessment; management and logistics; and staff development. Appendix 1 presents four examples of written student self-reflection. Appendix 2 presents an annotated bibliography of 98 portfolio articles catalogued between December 30, 1989 and January 31, 1991. (RLC)