At all levels of education the assessment of learning is generally regarded as an integral part of teachers’ work. For early childhood teachers, i.e., those who work with children in the age-range birth to six years, there are very particular considerations arising from the characteristics of young learners and the nature of early learning. This paper reviews the research on formative assessment of early learning and development. In doing so, it explores important theoretical constructs related to early learning and synthesises research related to key aspects of young children’s learning. It discusses the methods that are most useful for developing rich pictures of early learning and development. Some of the challenges inherent in formative assessment in early childhood settings are also outlined and discussed.