Adolescents' developing sense of competence is based on two domains, ability and intelligence. Intelligence testing generally presumes a conception of ability as current capacity that limits the extent to which effort can improve performance. Conceptions of intelligence, and other skills, involve implications about the nature of different forms of abilities. The products of acculturation are involved in the conception of intelligence. To assess conceptions of ability, students were asked to interpret a performance situation in which two people applying differing amounts of effort earned the same score. Results indicated the attainment of an adult-like conception of ability is accomplished during early adolescence, whereas adult-like conceptions of intelligence are established toward the end of adolescence. Impaired performance is likely in early adolescence when students feel likely to fail, feel incompetent, and believe ability is the same as capacity. When older adolescents and undergraduates were interviewed, three levels of intelligence affecting performance were recognized: (1) difficulty of the skills; (2) effortful acquisition of information; and (3) problem solving or creative ability. Verbal ability corresponded with crystallized intelligence and nonverbal ability with fluid intelligence. The value placed on these abilities and students' perceptions of their competence affects self-esteem. A two-page list of references is included. (GDC)