This digest examines the use of standardized, nationally normed testing in assessing the progress of American Indian and Alaska Native (AI/AN) students and describes alternative forms of assessment. For years, researchers have criticized the overuse of standardized, nationally normed tests to assess learner and school success. Problems with such testing are compounded for AI/AN learners by the common disregard for the diversity of languages and cultures among Native learners. Researchers have suggested that many standardized tests are inappropriate for Native students, and have concluded that public school reliance on such tests may hurt Native Americans. The popularity of IQ and other standardized testing has also encouraged a mindset that looks for deficiencies in the individuals being tested or in their cultures, rather than in the tests themselves. Before the European conquest of America, nearly all Native peoples used forms of performance-based assessment to determine how each individual could best contribute to the survival of the tribe, clan, or village. Performance-based assessment directly examines accomplishment of specific tasks that are important for life; current forms include student portfolios, student performances, teacher observations, interviews, self- and group assessments, work sampling, and extended tasks. Development of performance-based assessment tools forces schools to relate curriculum to present and future real-life situations. Such assessment is supported by the Indian education community and is being implemented in a growing number of tribally controlled schools. Contains 18 references. (SV)