This overview of competency based education (CBE) explores some of the important policies and dimensions of CBE that go beyond the popularized notion that simple tests can be devised to make student promotion and graduation decisions or to demonstrate possession of required or desired competencies. Examined are such areas as the reasons CBE has become so popular, the nature of CBE, the focus of CBE, competency standards and minimums, the measurement of competencies, students who fail, school system change and reform, an approach to implementing CBE, and the pitfalls of implementation. The author concludes that CBE and assessment programs are complex processes that are best described as instructional management systems. Further, a CBE program must be viewed as something more than a testing program to make promotion and graduation decisions and must be accompanied by a strong commitment to correct pupil deficiencies when they are discovered. (Author/IRT)