The purpose of this research was to examine online instructors' perspectives on assessment practices within online environments. Nine online instructors from seven institutions were interviewed for this grounded theory qualitative research. Three main aspects emerged from the analysis of the interviews that were involved in online assessment practices: student learning, instructional design, and interaction. The findings from this study suggested that online learning environments are uniquely different from the traditional classrooms, especially the forced nature of discussions and greater emphasis on interactions. In addition, the findings indicated that unique characteristics of online environments along with instructors' epistemic belief have an impact on course design and delivery.