It is of crucial importance for the administrator to understand the complexity involved in managing a program of applied performance testing (APT). This paper attempts to clarify the potential and problems inherent in such an undertaking. Many citizens feel that public schools should be offering students the opportunities to acquire skills that will be of value in their everyday living. APT offers a tool for examing these concerns. APT is defined as tests designed to measure performance in an actual or simulated setting. In education, performance tests focus on the measurement of performance of tasks significant to the student's life outside the school or to adult life. Topics of this paper include the genesis of APT is education; assumptions on which the validity of APT rest; how will APT modify school processes; potential problems related to APT; developing support for APT; and suggested research. (RC)