This study explored the impact of performance assessment versus traditional paper-and-pencil assessment on graduate students' achievement and motivation to learn while enrolled in a 16-lesson course on program evaluation methods. Students in two sections of the course were exposed to the same content and instructional methods, with one exception: students in one section were exposed to performance assessment during which they demonstrated their knowledge and skills while conducting a program evaluation in a 4th grade classroom, whereas students in the other section were provided with a written scenario of that 4th grade program and were required to answer questions on a traditional paper-and-pencil test about program evaluation methods. Results revealed that students exposed to performance assessment achieved somewhat higher scores on the final examination and demonstrated significantly higher levels of motivation to learn than did students evaluated by traditional paper-and-pencil tests. Qualitative analysis of the students' written expressions about the course and of their comments from group interviews revealed possible explanations for these outcomes. (Contains 2 tables.)