Performance-based assessment has long been advocated as an alternative to traditional standardized testing in EFL education, owing to its strength in measuring students’ actual abilities to respond to real-life language tasks. However, there remain some challenges in validating performance-based assessment outcomes, which have hindered its wider adoption. In this chapter I outline some fundamental aspects of performance-based assessment, in particular its definition, its underpinning philosophies and characteristics, and some positive and negative washback effects. The chapter concludes by analysing the implications of using performance-based assessment to assess student performance in English language classrooms.