Developing and assessing individuals' competence to identify business opportunities is of increasing importance in the current widespread introduction of entrepreneurship programmes in higher education worldwide. However, performance tests to assess opportunity identification competence (OIC) are scarce in the entrepreneurship education literature. This study elaborates on the development and application of such a performance assessment tool: the opportunity identification competence assessment test (OICAT). In the OICAT participants are asked to generate business ideas in the area of sustainable development. This study investigated how bachelor's students, and master's students following entrepreneurial courses, identify opportunities. The results suggest that the OICAT is successful in tracking individual differences in OIC. The OICAT could be used as a learning-oriented assessment, helping students find out both what they already can do and what they need for further improvement.