Not since the development of the objective paper and pencil test early in the century has an assessment method hit the American educational scene with such force as has performance assessment methodology in the 1990s. Performance assessment relies on teacher observation and professional judgment to draw inferences about student achievement. Educators have begun to embrace the reality that some targets, like complex reasoning, skill demonstration and product development require the use of subjective, judgmental means of assessment. This digest provides a summary of attributes of sound assessments and the rules of evidence for using them well. Various ways to take advantage of this information are presented. The following aspects are detailed: The Basic Methodology; Sound Performance Criteria; Sound Performance Exercises; Effective Scoring and Recording; and Performance Assessment in the Guidance Context. (JBJ)