Focusing on the competency based education movement (CBE), this chapter is one of seven sections of a report that examines the assessment of occupational competence. The chapter begins by reviewing the prominent CBE programs, their institutional objectives, and how competencies are identified and assessed. In particular, the degree to which institutional goals influence the identification and assessment process is examined, with traditional programs as a comparison. Some of the questions to which the chapter responds are the following: What are the distinctions between CBE and more traditional programs in the way they go about assessing competence? How does the specification of competencies shape curriculum content? How does the practice of assessment affect student learning? And how do assessment procedures limit or distort the competencies that are defined as curriculum objectives? Following the review of the state of the practice, a model for competency definition is introduced. The model becomes the framework for a discussion of the practical directions that institutions of higher education can take in pursuing their goals, within some of the real-world limitations imposed by tradition, the faculty, time, and financial resources. (Other sections of the report are available separately--see note. The first is an overview; the last is a synthesis of issues.) (LRA)