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Professional competence requires a commitment to lifelong learning, self-assessment, and excellence. Complex skills such as these require flexible and comprehensive teaching and assessment measures. We describe a combination of working and performance portfolios that both foster and evaluate the development of professional competence. We explain the conceptual and practical underpinnings that maximize the effectiveness of these tools. Drawing on experience with University of Washington residents, we identify 5 criteria that can help promote successful use of portfolios: separate working and performance functions of portfolios, developing a supportive climate, developing skills in faculty and residents, observing progress over time, and fostering mentorship opportunities.