This guide is designed to introduce adult literacy educators to the concept of portfolio assessment and to provide some guidance about how to incorporate portfolio assessment into adult literacy education work. An introduction describes what a portfolio is and provides an overview of the four major areas of reflection and decision making that make up the portfolio assessment process. The teacher must: (1) decide whether portfolio assessment is consistent with his or her own individual approach to instruction and assessment; (2) plan portfolio assessment; (3) implement portfolio assessment; and (4) evaluate the process and revise it for future use. The next section focuses on the process of clarifying the philosophy and approach to instruction and deciding if portfolio assessment is consistent with the instructional program. The next two sections look at the processes of planning and implementing portfolio assessment, highlighting adult literacy educators' and students' experience. This is followed by a discussion of impacts, administrative issues, and recommendations for the field, including national and local support mechanisms, training for trainers in portfolio assessment, incorporation of portfolio assessment into the indicators of program quality, and improved professional support and working conditions. Appendixes include sample forms and tools that programs and educators have created for portfolio assessment, and a 22-item selected annotated bibliography. Contains 46 references. (YLB)