The use of portfolio assessment in the Dallas (Texas) Independent School District and the future of portfolio assessment are discussed. A literature review is followed by a description of the development process that preceded the Chapter 1 portfolio assessment of the Dallas schools. Portfolio results are then compared to the standardized measures available within the school district, and the issues of reliability and validity are discussed. The policy implications of portfolio use are also discussed. The experiences of the school district lead to the conclusion that the current theoretical model for portfolio assessments should be changed. When a portfolio is used for accountability purposes, it must be designed from the top-down with clearly defined criteria and appropriate rubrics. Reliability in portfolio assessment comes only from a well-structured and carefully scored portfolio. A portfolio designed to improve instruction and learning must be designed from the bottom up. It is not possible to use a single portfolio assessment system to accomplish both goals. (Contains 1 figure and 19 references.) (SLD)