Background: The Accreditation Council for Graduate Medical Education is embarking on the major task of a paradigm shift in graduate education in the direction of competency-based medical education and evaluation of outcomes. The Objective Structured Clinical Examination (OSCE), a measure of clinical competence that focuses on outcomes via observable behaviors, is gaining national recognition. Objective: To review the pediatric literature relevant to the OSCE. Method: A MEDLINE search from the date of the original report of the OSCE (1975) to the present was performed. All English-language studies regarding the use of the OSCE in pediatric education published in the United States and Great Britain were reviewed. Main Outcome Measures: Reliability and validity of the OSCE were examined. Use of standardized pediatric patients was discussed. Results: A greater number of stations and similarity between tasks at different stations increased the reliability of the OSCE. A greater number of stations increased sampling of material and content validity. Correlation between the OSCE and precertification examinations ranged between 0.59 and 0.71, with P≤.01. Correlation between the OSCE and monthly clinical evaluations was much lower (0.39-0.57), but still statistically significant at P≤.05. Gaps between expected and actual performance were documented. Overall, the experience of being a standardized patient was viewed as positive by children and their parents. Conclusions: With appropriate attention to design, acceptable reliability and validity can be achieved for the OSCE. Significant correlations between the OSCE and precertification examinations as well as monthly clinical evaluations were found, the former being stronger than the latter. We conclude that the combination of the OSCE, standardized board examinations, and direct observation in the clinical setting has the potential to become the 'gold standard' for measuring physician competence.