Background: The “competency movement” has become increasingly prominent in the education, training and supervision of professional psychologists. Method: This article reviews the origins of that movement. Results: With its roots in behaviourism, the WWII aviation industry and the vocational training sector, the limitations of the approach for application to professional psychology, where practitioners must demonstrate proficiency in a wide array of clinical and often “higher-order” skills, are discussed. Conclusions: Although the competency movement is taking firm hold in an Australian context, the review of the literature highlights potential difficulties associated with uncritical acceptance of the approach and discuss directions for future development. Irrespective of the directions ultimately taken, the education, training and supervision of professional psychologists must be based in the availability of psychometrically sound and ecologically valid competence assessment tools.