There is no doubt that every member of the society would agree that all healthcare providers in practice should be competent. For nurses to work efficiently and effectively, the areas of competency must be identified for specific roles and settings. Competencies describe the specific job requirements and job environments. They are useful for managers to select staff. Orientation of staff provides us with the assessment needs and validation of high-risk, high frequency interventions, while ongoing education and training addresses high-risk, low-frequency interventions. The present study aims to determine whether a suggested assessment system is an effective measure of clinical competency in nursing, and to investigate the views of students and instructors who are using the assessment system. The study sample consisted of all nurse students who were enrolled in the third academic year (171). The second sample consisted of 12 clinical instructors: 4 from pediatric nursing and 8 from nursing administration department. Three tools were used for collection of data: two for students, and one for clinical instructors. The assessment system was the main tool comprising competency-based performance indicators. The second and third tools were respectively students and clinical instructor's opinionnaires. Assessment of the reliability of the developed tool has shown high Cronbach's alpha coefficients. Total competency-based domain had an internal consistency of a =0.90. The findings suggest that these competence indicators are meaningful to nurse students at dif"(erent settings. Finally, the study concluded that the developed tool may provide utility to be used as a reliable and accurate measure of student nurse competence, and it can be used as a reference for teaching, maintaining, and correcting the performance of nursing students.