This article explores the realities of grading and report cards within the context of standards-based physical education (SBPE). Specific objectives are to (1) identify standards for conducting quality assessments, (2) examine grading issues and concerns, (3) present guidelines for grading in SBPE programs, and (4) exemplify grading and reporting schemes that emphasize clear reference points (content standards and learning targets). Teachers need to assess accurately and use assessment to benefit students, not merely to sort and grade students. The keys to quality assessment practices are built on five dimensions: a clear purpose, clear targets, sound design, effective communication, and student involvement. Teachers also need to decide the basis for grading, which ingredients to use, how factors will be weighted, degree of professional judgment, and relative emphasis on mastery and progress. This article offers practical guidelines for grading in SBPE that support learning and student success, and includes samples of an evaluation report and a report card that align with learning targets and standards. (Contains 3 tables and 2 figures.)