Among the many critiques of competency-based approaches to education and training (CBT) is a strain which draws on Foucault's analysis of "disciplinary" power and knowledge. Foucault offered an interpretation of modern institutions, such as prisons, armies and schools, which revealed subtle mechanisms of surveillance and systems of knowledge that shaped the self-understanding and activity of participants. Robinson (1993) and Edwards and Usher (1994) were among the first researchers to call attention to the disciplinary potential of CBT. But Foucault went on to argue that discipline is a component in an overarching system he called "governmentality". The analysis of governmentality augments the analysis of discipline by foregrounding the effects of knowledge of populations and modes of power that operate at a distance. In this article, the disciplinary critique of competency-based systems is extended by demonstrating the relevance of Foucault's analysis of governmentality to a contemporary national system of CBT. The authors use a case of 25 years of CBT in an Australian vocational education institution as a scaffold for the argument. This case is germane because it presents a succession of practices of CBT which allows us to trace and scrutinise a shift from a disciplinary to a governmental framework.