This paper focuses on how the State of Kentucky has developed performance-based assessment programs, and the concept of continuous assessment in teacher education has formed over the past several years. The paper discusses the work done by the Kentucky Education Professional Standards Board, the impact of 1997 legislation regarding postsecondary education and continuous assessment, and the continuing work of the Continuous Assessment Review Committee, a standing committee of the Standards Board. It also focuses on how two institutions (Asbury College, a private institution, and Western Kentucky University, a public institution) have addressed performance assessment and the mandates of continuous assessment, and have integrated the concepts into their teacher education programs. Finally, the paper summarizes how data are being reported to the Standards Board from the state's 26 private and public institutions and the uses being made of these data. (Contains 18 references.) (SM)