This study examined students' competencies in engineering education at the university level. First, we developed a competency model in one specific field of engineering: process dynamics and control. Then, the theoretical model was used as a frame to construct test items to measure students' competencies comprehensively. In the empirical application, the reliability of the test was examined. The results confirmed the applicability of the theory-based test. Also, associations between students' competencies and individual characteristics were explored. Students who showed higher competencies could be identified based on their individual characteristics, such as participation in self-assessments. Finally, we demonstrated how to apply the standards of theory-based testing to everyday routines at the university and also highlighted some challenging issues to be considered when implementing theory-based testing in practice. This approach could be valuable: Tests based on theoretically sound models allow for appropriate measurement of students' competencies in higher education.