Many changes have occurred in setting performance standards during the past 15 years, mainly increased emphasis on such factors as meeting rigorous cut-off scores, the details of setting cut-off scores, concerns about legal issues, and concerns about fairness. Rather than the old practice of simply passing or failing a student, using multiple cut-off scores has become a more common practice, which, however, has become a considerable burden for test developers. Since the results of high-stake tests are used for the purpose of accountability, it is required that a test developer or user to report in detail how cut-off scores are set up (e.g., the method, judges and their training, whether the normative information is used, etc.). For the same reason, there is an increased recognition of the legal constraints and problems faced by the users of tests with fixed cut-off scores when passing or failing has important consequences for test-takers. It is now believed that at least a two-year prior notice should be given when cut-off scores will be used for accountability. In addition, the evidence of fairness must be provided for the point at which the cut-off scores are set. This presentation will provide a comprehensive review of these changes. Challenges in setting cut-off sores will also be reviewed in detail. Some current understanding of the key issues and concepts in setting performance standards will be introduced, e.g., it is no longer necessary to believe that there is a true cut-off score. Finally, the impact of these changes on the practice of setting performance standards in physical education will be discussed.