In Hong Kong, as a result of an education reform, the School Management Initiative (SMI), which started in 1991, formally introduced a teacher appraisal system to the schools. Whereas some criteria for teacher appraisal have been set up, there has not been any clear guideline as to who is going to use them to appraise whom. Addressing this issue, this chapter is based on two recent studies on the purpose of teacher appraisal and approaches for formative and summative appraisal. The chapter concludes with some suggestions for implementing a teacher appraisal system for achieving formative and summative purposes, paying special attention to the roles of appraisers and appraisees as well as relationship between appraisal and professional development.[Copyright © 2005 Nova Science Publishers.]