All students, including those with significant cognitive disabilities, must participate in accountability testing under NCLB regulations. Each state must provide an alternate assessment for students unable to participate in general accountability testing. Carefully designed alternate assessment systems have the potential to go beyond meeting federal reporting requirements by providing meaningful information about student progress that can guide decision making at the classroom and district level. In this paper, we discuss issues related to alternate assessment, including (a) balancing standardization and individualization, (b) setting performance criteria, (c) establishing links with progress monitoring and instruction, and (d) addressing special challenges of rural school systems that must be considered in designing and implementing an alternate assessment system that can fulfill this vision.