The assessment of clinical competence is becoming increasingly complex, patient cen tered, and student driven. Traditionally, clini cal evaluation methods consisted primarily of faculty observations, oral examinations, and multiple-choice tests. Increased faculty work load, discontent with traditional methods of clinical skill assessment, and developments in the fields of psychology and education have led to the formation of new modalities, namely performance assessments. The literature per taining to the performance assessment with standardized patients is reviewed. Based on this literature, several areas for the future direction of performance assessment are pro posed, including (a) toward evidence-based locally developed assessments, (b) toward an understanding of educational outcomes and noncognitive assessment factors, and (c) toward more student-driven assessments.