In this chapter, the process of developing a form of alternative assessment, the portfolio, will be described. The portfolio is a purposeful collection of student work that exhibits the student's efforts, progress and achievements over time. Portfolio develpment supports the assessment of long-term projects, encourages student-initiated revision and provides a context for presentation, guidance, and critique. The purpose of portfolio development is the same no matter the course or age of the students, to display the products of instruction in a way which challenges teachers and students to focus on meaningful outcomes. The context in which the use of portfolios is described here is a graduate level statistics course where an additional purpose is to provide students with an organized reference on statistical programming, analylsis, and interpretation. However, the process used in developing portfolios and the important issues surrounding portfolio assessment can easily be generalized to different educational levels and subject areas. Some of the questions addressed in this chapter are 1) What is the underlying belief concerning knowledge construction which guides portfolio assessment?, 2) How do you develop and use portfolios?, 3) What does a portfolio look like?, and 4) What are the major considerations in deciding to use portfolio assessment?