In 2000, the Education Commission proposed the new three-year senior secondary system in its newly published Reform Proposals for the Education System in Hong Kong. Working groups were then set up to study and investigate the feasibility of this new system, to formulate concrete measures, to develop transitional arrangements and to formulate working schedules. In October 2004, the then Education and Manpower Bureau (EMB) published a consultation document on the proposed new academic structure commonly know as "334". The new senior secondary system and curriculum reform aims at enabling every student to attain all-round development with sound basic knowledge for lifelong learning in future. In relation to the reform of assessment and examination system, a new Hong Kong Diploma of Secondary Education (HKDSE) was proposed to replace the existing HKCEE and HKALE at the end of S5 and S7 respectively, in order to create space for and reduce pressure on both students and teachers. Furthermore, in order to have a more comprehensive assessment of students' performance, school-based assessment was proposed to be a component of this new public examination. In response to such initiatives, mathematics curriculum reform had been formulated as early as 2003. Curriculum Development Institute (CDI) and Hong Kong Examinations and Assessment Authority (HKEAA) worked together closely to form the CDC-HKEAA Committee on Mathematics Education (Senior Secondary) in December of the same year to take up this important historical task of mathematics curriculum reform. In May 2005, the Committee published the Proposed New Senior Secondary Curriculum and Assessment Framework: Second Consultation Document of Mathematics. Since then, the suggestions on the development of school-based assessment have always been one of the most controversial issues. This paper will first examine, from both theoretical and practical views, the possible approaches, frameworks, methods and instruments for the development of mathematics school-based assessment. General values of school-based assessment in contemporary mathematics education will then be discussed. Second, the policy design and implementation of the Hong Kong mathematics school-based assessment will be investigated and analyzed. Finally, its possible challenges and impacts on frontline-teachers, teacher-educators and curriculum developers will be reflected on.