Objective structured clinical examination (OSCE) has been used to assess medical students since the mid 1970s, and in more recent years has been increasingly utilised to assess students from nursing and the allied health professions. This growing utilisation has led to considerable debate within the literature pertaining to the optimal use of OSCE as an assessment process. The purpose of this paper is to present a narrative review regarding some of the key issues affecting the utilisation of OSCE within the assessment of nursing students. The paper briefly reviews the historical development of OSCE within health professional assessment, and summarises some of its key strengths and limitations. It then offers a more 'in depth' consideration of the research literature pertaining to the reliability and validity of the OSCE process, which is then used as a basis for exploring some of the particular issues that need to be considered when OSCE is used to assess nursing students. Key issues identified include the need to carefully prepare and pilot new OSCE examinations and marking tools in order to ensure reliability and validity is optimised, and also the need to carefully consider the length, number and interdependence of OSCE stations to ensure that the potentially competing requirements of validity and reliability are balanced. The paper also recognises that whilst the evidence base regarding OSCE is extensive, the evidence base specific to nursing is more limited. There is therefore scope for further research in this area, as well as the need for careful debate regarding how national guidance may be a way of enhancing and standardising future OSCE examinations. The paper concludes that whilst caution must be applied in relying on OSCE as a sole means of practitioner assessment, used carefully it can make a helpful and meaningful contribution to health professional education.