This paper provides a review of the health care literature on clinical competence with a focus on occupational therapy. A simple know-can-do hierarchical model provides a framework for understanding the concept of clinical competence and for exploring the issues related to its definition and assessment. While there is general agreement across the health professions regarding the broad meaning of competence, the profession-specific components have been more difficult to identify and measure. Much of the research on the assessment of clinical competence has focused on the validity of certification examinations, especially in medicine, or on the evaluation of student performance, as is the case in occupational therapy. Although a variety of evaluation measures have been developed, the evidence is clear that one comprehensive tool that provides a reliable, valid and cost-effective measure of clinical competence does not exist; therefore, a combination of evaluation methods is needed for assessment purposes. Defining and assessing competence remains a particular challenge for the profession of occupational therapy.