A demonstration project was conducted to develop and pilot test a portfolio-based approach to learning assessment in adult basic education (ABE). The portfolio process and materials were developed under the oversight of a project task force after a review of existing portfolio assessment practices. The portfolio assessment approach was pilot tested at 3 sites with a total of 20 students after teachers had attended training workshops. The portfolio process and materials, which were modified several times during the yearlong test, were found to have positive impacts on student participation in the assessment process, needs assessment and instructional planning/organization, and student learning. Major limitations of the portfolio assessment process included the following: large amounts of paperwork and time required, difficulties in getting students to complete the required forms, and students' and teachers' problems with the collaborative assessment process. (Appendixes constituting approximately 60% of this document contain the following: self-test for portfolio development, information about types of portfolios, strategy worksheet, task force membership list and meeting agendas and minutes, study flyer about portfolios, individual student data, list of site visits, modifications of the portfolio materials during the pilot testing, and working and summary portfolio materials.) (MN)