The Hong Kong Special Administrative Government (HKSAR) has been encouraging the teaching professionals at all levels to apply Information Technology (IT) in education. The general public usually connects IT in education with computer-assisted instruction (CAI), computer-assisted learning (CAL), and information search in the internet. In fact, IT can bring in other advantages such as developing a continuous and dynamic approach to educational testing. At present, the common practice of paper-and-pencil testing (P&P) is that all examinees are arranged to receive the same set of test questions at the same time-slot. One of the major shortcomings of this arrangement is that competent examinees may waste time to answer simple questions while low ability examinees may face challenging questions that could destroy their confidence in the subject. This practice is actually against a very basic educational principle: catering for individual needs. With the availability of powerful personal computers and the advancement of psychometric measurement, tailoring tests to individual's ability becomes much easily realized. A system that delivers tailor-made tests for individuals using computer with certain item selection program is called Computerized Adaptive Testing (CAT). As CAT has many advantages over the traditional P&P, it is becoming prevalent in many advanced countries. However, CAT also has shortcomings. For example, it cannot measure certain kinds of mathematics abilities. This paper will describe the general background and the current development of CAT and particularly will discuss in more details the potentials and limits of using CAT for Mathematics assessment.