Work-based assessment (WBA) is the assessment of trainees and physicians across the educational continuum of day-to-day competencies and practices in authentic, clinical environments. What distinguishes WBA from other assessment modalities is that it enables the evaluation of performance in context. In this perspective, we describe the growing importance, relevance, and evolution of WBA as it relates to competency-based medical education, supervision, and entrustment. Although a systematic review is beyond the purview of this perspective, we highlight specific methods and needed shifts to WBA that (a) consider patient outcomes, (b) use nonphysician assessors, and (c) assess the care provided to populations of patients. We briefly describe strategies for the effective implementation of WBA and identify outstanding research questions related to its use.