Description: The study topic was a yearly course on alternative performance assessment given to four separate groups of Jewish and Arab in-service high school teachers (N=101). The course followed the life-long learning approach, as part of the teachers' professional development (Borko, 2004; Holmesland & Tarrou, 2001). It included theoretical studies as well as workshop-based experience in building assessment tools and applying them in teaching (Birenbaum & Dochy, 1996). The courses took place in a constructivist learning environment which served as a model (Brook & Brooks, 1993; Driver, 1989; Vygotzky, 1978). The study objective was to evaluate the effectiveness of the course in acquiring theoretical knowledge in relation to their students' formative performance assessment, their self-efficacy and school-wide applicability. Methodology: Research instruments included a questionnaire composed of 74 closed items and two open questions, given as a pre-test and a post-test, as well as portfolio analysis. Conclusions: Research findings point at the course's contribution to a gain in self-confidence and self-efficacy, awareness of students' difficulties, and transformation of innovative theoretical knowledge acquired into pedagogical perception and practical knowledge of alternative approaches to performance assessment, as follows: 26% mentioned their expertise and their self-efficacy, especially in reflection skills and writing a reflective journal, their control of formative assessment tools, constructing an authentic performance task, organizing a portfolio and writing criteria-rubrics (20%). The acquired theoretical knowledge was correlated to the participants' pedagogical beliefs and reports of actual work patterns. There was a rise in the number of participants who declared their enthusiasm, motivation, and openness to new ideas in instruction and assessment. 75% mentioned their perception change as well as their work patterns regarding fairness in assessment, so that they now inform their students in advance their grades' components, and use more formative verbal assessment accompanying the grade. 25% allow their students' self assessment and participation in determining multi-dimensional criteria for their own performance assessment. At the same time, there were fewer participants who assess their students globally and subjectively. The content analysis of the participants' open questions and their portfolios strengthened the above conclusion about the transformation of academic knowledge into pedagogical and practical knowledge, with increased use of acquired professional terminology: 84% expressed interest in changing their school's assessment policy, 56% related to the idea of variety in instruction-assessment strategies, raising the students' involvement in their own learning and assessment. 52% discussed the advantages of alternative assessment in regard to the heterogeneity of the students' class and their multiple intelligences (Armstrong, 1998), which allows for a fairer multi-dimensional assessment of students' competence. 20% mentioned the idea of formative assessment as promoting challenge, meaningfulness, motivation to learn, advancement of students and improvement of their attitude towards learning, as well as encouraging the development of an independent self-regulated learner. A quarter of the arguments related to the test limitations as sole or main assessment tool, as they do not truly reflect the students' comprehensive abilities and knowledge, and put some of them under tremendous pressure and anxiety. Another quarter of the reasons also related to the need to transform their own knowledge into the entire school staff's collective knowledge, and the need for a conceptual change in school policy in relation to students' alternative assessment. We can see that the active learning and constructive dialogues between course instructor and participants in a constructivist learning environment, served as a base for modeling and contributed to the acquiring of theoretical knowledge about alternative assessment approaches which was converted into practical knowledge, control of performance assessment skills and the gain of the participants' self-efficacy and ability to implement this knowledge in their schools.