This article is based on a study of the 2001-2002 teacher licensure requirements in all 50 states in the United States. For the study, data were collected on whether states require licensure candidates to pass tests of basic skills, subject matter knowledge, and/or pedagogical knowledge; and whether states use performance assessments in making professional licensure decisions. The main objectives of this article are to examine the extent to which states implemented performance assessments for use in making professional licensure decisions as of 2001-2002, to consider differences among various types of assessments and different ways in which they are used, and to explore challenges to their use in licensure decisions. Despite the promise of these new assessments, few states have implemented them due to concerns about costs; the need to establish evidence related to validity, reliability, and fairness; and the assessments' potential effects on teacher supply.