To support students’ learning, new approaches to assessment are implemented next to innovative methods of English as a second language (L2) or foreign language teaching (EFL). Alternative forms of assessment of a formative rather than a summative nature are increasingly endorsed by language teaching faculty. Among these, there has been a growing trend in the use of portfolio assessment. Nevertheless, as portfolio assessment has been mainly implemented in other fields such as visual arts, health, and architecture, its relevance, reliability, and validity in L2 and EFL are still topics worth researching. The aim of this book chapter is to review the theoretical basis of alternative or formative assessment and the implementation of one of its types, namely portfolio assessment in L2 and EFL contexts. A thematic literature review was conducted based on the predetermined research objectives. The findings revealed that portfolio assessment have resulted in enhanced learning accompanied by affective and metacognitive benefits. However, issues related to the reliability of assessment criteria, students’ treatment and provision of feedback, and students’ reflection and capacity in compiling portfolios are still factors that hinder successful portfolio implementation in L2 and EFL writing courses. Based on the findings, implications for pedagogical practices and research are put forward.