Performance based assessment refers to tasks that require students to construct responses or take actions to demonstrate specific knowledge or skills. Performance assessment tasks appear in a variety of formats, but they focus on higher order skills and are nonroutine, and sometimes loosely structured, in nature. A number of concerns have been expressed about performance assessment, usually noting the difficulties of producing such assessments and implementing them on a large scale. Kentucky and California are among the states taking an early lead in using performance based evaluation. Advocates believe that performance assessment has the potential to change instructional practices in schools, and that as tests change, teacher practices will change. However, changes in teacher education will be necessary in order to adopt the successful use of performance assessments. Standardization will be necessary if the tests are to be used for accountability and comparisons. Special attention must be paid to the reliability of aggregated scores when such scores are used to represent the performance of classrooms, schools, and districts, as well as subgroups of students classified by race, ability, or sex. A four-item annotated bibliography contains some interesting resources for further reading. (Contains 74 references.) (SLD)