This article discusses the potential for discrimination inherent in competency-based testing and suggests some provisions which might be included in a fair competency-based program. Discussed are: (1) racial discrimination; (2) inadequate phase-in periods; (3) tests which are not reliable or have not been validated; (4) inadequate matching of the instructional program to the test; (5) inadequate remedial instruction which creates or reinforces tracking; and (6) unfair apportionment of responsibility between students and educators. Numerous studies and legislative action dealing with competency-based tests are used to illustrate this paper's argument that more valid competency testing is needed. (Author/EB)