A performance-appraisal system is often fraught with tensions between the dual purposes of accountability and development. In practice, the nominated appraiser is responsible for evaluating the performance of a colleague and at the same time building a relationship that fosters development. Appraisal systems in New Zealand schools have been criticised for being nothing more than tick-box exercises with a heavy emphasis on compliance. Furthermore, development initiatives have often centred on professional goal setting that is not directly related to student-learning outcomes. The study reported in this article shows that two schools have experienced successes and challenges as they have attempted to make teacher inquiry a regular, developmental part of appraisal activity. It also highlights tensions in bringing together the formative purpose of teaching as inquiry with the more summative purposes of appraisal.