Assessment within the medical system in India is largely summative. There is, however, an increasing awareness of the need for formative assessment. In this study we developed a system for the formative assessment of 'core' areas within the physiology curriculum. Student reactions to the assessment were ascertained. The results indicate that the vast majority of students react positively to formative assessment as it allows them to gauge their strengths and weaknesses without penalization. In addition, the assessment revealed considerable lacunae in the transfer of 'core' knowledge despite what the faculty considered to be an effective teaching programme.