This chapter gives an overview on objectively structured practical examination. One of the most important aspects of training of a doctor is acquisition of practical skills. Objective assessment of practical skills (psychomotor skills) is thus a challenge for examiners. Objectively structured practical examination (OSPE) is a method of examination which evaluates student’s wide range of skills uniformly and objectively. An OSPE consists of a number of predetermined stations through which each student rotates. The use of OSCE for formative assessment has great potential as the learners can gain insights into the elements making up clinical competencies as well as feedback on personal strengths and weaknesses. The reliability, validity, objectivity and practicability or feasibility of this examination are based on the number of stations, sampling of stations, quality of stations and method of scoring. The steps in starting the OSPE setup at departmental levels are also provided in this chapter.