Assessment nowadays has becoming an essential part of effective teaching and learning. To compete in the global world, the Malaysian Education has shifted the norms of summative assessment to a more formative approach, which is classroom-based assessment, where learning development of the learners are being focused on instead of the outcome. While classroom-based assessment offers a wide opportunity for the educators to choose the methods and approach they think appropriate and effective when assessing students’ reading, yet majority of the English language educators find it difficult in dealing with classroom-based reading assessment. In accordance to that, this paper provides a literature review on 1) the methods preferred by the ESL educators in practicing classroom-based reading assessment and 2) the challenges faced by ESL educators in implementing classroom-based reading assessment. In assessing reading, education authorities as well as educators may work together in finding the solution.