Heightened national interest in population-based medicine, clinical preventive services, and health care management underscores the current need for definition and assessment of physician competency in these areas. This article describes a project sponsored by the Health Resources and Services Administration (HRSA) to develop competencies for each of the three specialty areas in preventive medicine and appropriate measures for the achievement of those competencies. We discuss fundamental issues surrounding assessment that helped guide the process, types of measurement strategies, and criteria for effective competencies and performance indicators. The article also explains the Work Group process used to reach consensus and identifies concerns and challenges raised during this process. We include the list of specialty competencies and performance indicators developed by the project. The project, entitled "Improving Training of Preventive Medicine Residents through the Development and Evaluation of Competencies," served as a model for interorganizational collaboration between the federal government (HRSA); a specialty society, the American College of Preventive Medicine (ACPM); and a preventive medicine residency program, State University of New York (SUNY) at Stony Brook. The commonality of competencies expected of residents in all three specialty areas of preventive medicine--occupational medicine, general preventive medicine and public health, and aerospace medicine--reaffirmed the rationale for including all of these areas within the single specialty of preventive medicine.