Background: There is unrealized potential in higher education for greater use of performance assessment, particularly in support of teaching and learning: Well-designed performance tasks can elicit evidence regarding what students know and can do with respect to complex learning objectives. At the same time, there is some pressure, at least in the United States, to widen usage of standardized assessments in order to facilitate comparisons among institutions. Aims and methods: We distinguish assessments requiring extended performances of some kind from those involving other response formats. Taking student-produced essays as a paradigmatic example, we examine the processes of assessment design and scoring as they pertain to the validity of the inferences drawn from student work products. We also briefly review the history of standardized assessments and the roles they have played in education. Further, we describe how advances in assessment theory and practice have permitted substantial relaxation in the implementation of standardization. Results: Our analysis of these issues in the higher education context draws on empirical evidence regarding both faculty usage of performance tasks (particularly as a means for enhancing the construct validity of an overall assessment) and faculty resistance to the imposition of externally developed, standardized assessments. We also describe efforts undertaken in the United States to strengthen faculty expertise in assessment design, scoring, and interpretation. Conclusions: We conclude that performance tasks have an important role to play in higher education, especially in view of the complexity and depth of the learning goals set for the students. For many purposes, they cannot be replaced by simpler, cheaper forms of assessment. Efforts to facilitate comparability in evaluating institutional outcomes, however, have not borne much fruit despite the substantial investments made. We argue that resources would be better directed at improving the quality of assessments developed and employed by college faculty and suggest how that might be accomplished.