Since their inception, family practice residency programs have been designed on a rotation-based format. It has been assumed that by having residents rotate through a series of educational experiences, they would assimilate the skills necessary to effectively serve as a family physician. An alternative approach is based on the attainment of competency, rather than on the completion of a set of experiences. This method of education is known as competency-based education, mastery learning, or, more recently, outcomes-based assessment. Within family medicine, there is a strong interest in the application of competency-based education to family practice residency training. In response to the growing need to discuss these and other related issues, the Society of Teachers of Family Medicine (STFM) Board created the Task Force on Competency-based Education. Its mission is to disseminate this educational theory to STFM's membership. This article reviews the theory of competency-based education, describes development of a competency-based curriculum model, and discusses the academic issues surrounding adaptation of this form of education to family practice residency programs.